Which of the following terms describes a legal agreement between two competent parties that promises a certain performance in exchange for a certain consideration?

A contract is a legal document that establishes a binding agreement between two competent parties, where each party commits to specific performance in exchange for something of value, known as consideration. Consideration can be a payment, a service, or any other valuable item that is exchanged between the parties.

Contracts must meet certain essential criteria to be enforceable, including mutual assent (an offer and acceptance), consideration, and the legal capacity of the parties involved. This ensures that both parties are legally bound to uphold their end of the agreement, providing a framework for accountability and resolution in the event of a dispute.

While an agreement or understanding may imply that parties have reached a consensus, they do not necessarily have the legal weight of a contract unless all legal elements are satisfied. Similarly, a guarantee is a promise that may bind one party to fulfill the obligations of another, but it is not the same as the agreement itself between the competent parties. Thus, the term that accurately captures the essence of the question is a contract.