Agreement and contract are two terms that are often used interchangeably, but they are not the same thing. While both refer to a legal agreement between two or more parties, they have distinct differences.
A contract is a legally binding agreement between two or more parties that sets out the terms and conditions of a transaction. Contracts can be verbal or written, but written contracts are preferable because they provide more clarity and are easier to enforce in court.
Agreements, on the other hand, are generally less formal than contracts and may not be legally binding. They can be written or oral and can cover a wide range of topics, including business partnerships, sales deals, or personal arrangements.
The key difference between an agreement and a contract is enforceability. A contract is a legally binding agreement that is enforceable by law. If one party breaches a contract, the other party has legal recourse. An agreement, on the other hand, is often not enforceable by law unless it is a specific type of agreement, such as a lease or employment contract.
There are also different types of contracts. For example, there are express contracts, which are created through written or verbal communication, and implied contracts, which are created through the actions of the parties involved. There are also unilateral contracts, where one party makes a promise in exchange for an act or payment from the other party, and bilateral contracts, where both parties make promises to each other.
In conclusion, while agreement and contract are often used interchangeably, they have distinct differences. An agreement is generally less formal than a contract and may not be legally binding, while a contract is a legally binding agreement between two or more parties. It is important to understand the differences between the two when entering into any type of legal arrangement.