An agreement is
a concept that includes any arrangement or understanding between two or more
parties about their rights and responsibilities with respect to one another.
In order to reach an agreement, parties
need only come to a common understanding as to their relative rights and
responsibilities, what is often termed a “meeting of the minds.”
An agreement may simply involve one
party accepting another party's offer. Since this scenario does not involve
consideration, it is not a contract. Other common examples of agreements which
are not contracts include gentlemen’s agreements and unlicensed betting pools.
The key element to all non-contract agreements is that they are not legally
enforceable.
The primary
benefit of an agreement that does not meet the criteria of a contract is that
it is inherently informal. Where the agreeing parties have a longstanding
relationship and share a considerable degree of trust, the use of a
non-contract agreement can save time and allow for more flexibility in the
fulfillment of the agreed-upon obligations.
