The Babylonian law of Contracts was the first highly developed system on this branch of jurisprudence in the history of the world. Many formalities were required in the making of contracts.

The lack of slaves in the country made the creation of the relation of master and servant an important branch of contracts. The time of these contracts were generally for one year, and an advance payment was customarily paid to the servant. The laborer acted as a free agent in making the contract, but the law was strict in enforcing them, and an attempt to avoid their performance on the part of servants met with severe penalties.

Partnerships were common, and the law of partnership was very complete. Future as well as present transactions could be made the subject of contract.