CONTRACT (Lat. _contractus_, from _contrahere_, to draw together, to bind), the legal term for a bargain or agreement; some writers, following the Indian Contract Act, confine the term to agreements enforceable by law: this, though not yet universally adopted, seems an improvement. Enforcement of good faith in matters of bargain and promise is among the most important functions of legal justice. It might not be too much to say that, next after keeping the peace and securing property against violence and fraud so that business may be possible, it is the most important. Yet we shall find that the importance of contract is developed comparatively late in the history of law. The commonwealth needs elaborate rules about contracts only when it is advanced enough in civilization and trade to have an elaborate system of credit. The Roman law of the empire dealt with contract, indeed, in a fairly adequate manner, though it never had a complete or uniform theory; and the Roman law, as settled by Justinian, appears to have satisfied the Eastern empire long after the Western nations had begun to recast their institutions, and the traders of the Mediterranean had struck out a cosmopolitan body of rules and custom known as the Law Merchant, which claimed acceptance in the name neither of Justinian nor of the Church, but of universal reason. It was amply proved afterwards that the foundations of the Roman system were strong enough to carry the fabric of modern legislation. But the collapse of the Roman power in western Christendom threw society back into chaos, and reduced men's ideas of ordered justice and law to a condition compared with which the earliest Roman law known to us is modern.