A contract is a legally enforceable agreement between two or more parties with mutual obligations. The remedy at law for breach of contract is "damages" or monetary compensation. In equity, the remedy can be specific performance of the contract or an injunction. Both remedies award the damaged party the "benefit of the bargain" or expectation damages, which are greater than mere reliance damages, as in promissory estoppel. In derivatives the contracts traded the most in terms of their actual value (as per the market) is known as active contracts by value. Derivatives contracts are used to provide leverage, speculate and make a profit if the value of the underlying asset moves the way they expect and Derivatives can be considered as providing a form of insurance in hedging, which is itself a technique that attempts to reduce risk.
