An agreement is any understanding or
arrangement reached between two or more parties. A contract is a specific type
of agreement that, by its terms and elements, is legally binding and
enforceable in a court of law.
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Difference
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Similarities
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Agreement
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Contract
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Definition
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An arrangement (usually informal) between two or more parties
that is not enforceable by law.
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A formal arrangement between two or more party that, by its terms
and elements, is enforceable by law.
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Validity based on
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Mutual acceptance by both (or all) parties involved.
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Mutual acceptance by both (or all) parties involved.
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Does it need to be in writing?
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No
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No, except
for some specific kinds of contracts, such as those involving land or which
cannot be completed within one year.
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Consideration required
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No
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Yes
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Legal effect
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An agreement that lacks any of the required elements of a
contract has no legal effect.
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A contract
is legally binding and its terms may be enforceable in a court of law.
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