True or False: A contract creates a mutual legal relationship obligating the seller to provide supplies and the buyer to pay for them.

A contract indeed establishes a mutual legal relationship between the parties involved. In this context, the seller is obligated to provide the supplies, and the buyer is obligated to pay for them. This principle is foundational in contract law, where the essence of a valid contract is the mutual agreement and understanding of the obligations each party is undertaking.

The creation of this legal relationship does not hinge on whether the contract is written or verbal, as long as there is a clear offer, acceptance, and consideration. Therefore, stating that this relationship exists simply reaffirms the fundamental nature of contracts, making the assertion true.

While written agreements can provide clarity and serve as evidence of the terms, contracts can also be valid and enforceable even when formed verbally, as long as the necessary elements are present. Government contracts also follow the same principles but are subject to additional regulations and requirements specific to public procurement, which does not negate the mutual obligations. Thus, the statement accurately reflects the nature of contracts overall.