Yes the statement is True. A contract tells an organization how must act and the consequences for failing to act properly.
Explanation:
It is true that a contract is an agreement which is stating rules and regulation and also the consequences which the company has to face if the rules are violated.
A contract,
- is an legal agreement
- is signed for specific period
- contains rules
- consists of benefits which the company will get
- also contains terms & conditions which might change from time to time
- should be signed by company as well as the party
- should even be signed by the witness of both the side
