Distinguish between agreement and contract
Sir Fredrick Pollock defined contract in his book, Principles of
Contract, as a promise of set of promises which the law will enforce. However, an agreement is referred to a concept
that involves an understanding or an arrangement between two parties regarding
their duties and rights subject to another. Hence, an agreement do not need to
be legally binding in the sense of law. However a contract need to be in
accordance to the law. The purpose of a contract should be legal, as illegal
contracts would be void. However, domestic agreements between people might be even illegal.
Furthermore, contracts are usually in written form as they are
formal and might be needed to use in the courts or other authorities. However,
agreements are less formal and could be either in written form or oral.
There are main two elements in an agreement which are offer and
acceptance. However, contracts need to have an offer, acceptance,
consideration, capacity, meeting of minds, legality and written form to be
accepted as valid contract.
In the sense of nature, agreements are complex and wider in scope.
However, contracts are narrow and not complex in their nature. And in the sense
of obligations, an agreement would usually involve a domestic or a social
obligation. However, a contract would involve a legal obligation which parties
should fulfill according to the law.
Hence, the main difference between a contract and an agreement is
that a contract is legally enforceable as contracts have legal backing.
However, agreements do not need to be legally enforceable as they can be in
verbal form too. Therefore all contracts can be called agreements, but all
agreements could not be called contracts.
Moreover, contracts and agreements can also be differed in the sense of
their elements.
