What is the Difference Between Agreement and Contract

What is an Agreement?

It can be easily defined as Offer by an individual person and acceptance of that offer by another individual person. An Agreement is a very large term and much complex in nature. Agreements only give rise to community and marital obligations but when an Agreement is enforceable by law, it is called as a Contract. Agreements only show the consideration of doing something by one person to another.

It is an Agreement which is executable by law. The Contract is of less scope when compared to the agreement. There are some conditions for an agreement to became into Contract, They are as follows

  • The contract should be in 2 or more than two parties.
  • There should be free agreement about the acceptance of the offer.
  • The agreement should be feasible by the law.
  • There should be certainty concerning about the details of the contract, etc.
  • The agreement should not hold any unlawful things.

Difference Between Agreement and Contract

What is a Contract?

Agreement is a legally binding contract that recognizes and regulates the rights and duties of the parties to the agreement.  An agreement is legally enforceable because it complies with the requirements and ratification of the law. A contract usually includes goods, services, money or promises of any of them.

In the event of a breach of contract, the law provides access to legal remedies such as damages and termination for the injured party. In Anglo-American common law, an agreement generally requires an offer, acceptance, consideration and mutual intention. Each party must have the ability to enter into a contract. Although most oral contracts are binding, certain types of contracts require formalities, either in writing or in writing.


Deprave features constituting defenses to supposed contract formation include:

  • Mistake
  • Incapacity, including mental incompetence and infancy/minority
  • Duress
  • Undue influence
  • Unconscionability
  • Misrepresentation or fraud
  • Frustration of purpose


Three types of mistake are consider below

  • Common mistake

These mistakes occur when both parties hold the same mistaken belief of the facts.

  • Mutual mistake

These mistakes occur when both parties of a contract are mistaken as to the terms.

  • Unilateral mistake

These mistakes occur when only one party to a contract is mistaken as to the terms or subject-matter.

Major Difference Between Agreement and Contracts


  • Offer and acceptance constitute an agreement
  • All agreements are not contracts
  • May not create legal obligation
  • Each promise and set of promises forming deliberation for each other
  • Agreement is a genus
  • Not binding contract


  • Agreement enforceability constitute a contract
  • All contracts are agreements
  • Necessarily creates legal obligation
  • Agreement enforceable at law
  • Contract is a species of an agreement
  • Contract is concluding and binding

Related: What is the Difference Between a Mortgage and a Loan

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