The terms “agreement” and “contract” need special knowledge in the legal world. They are often used, but they have distinct meanings and implications. Very few people know The Difference Between an Agreement And a Contract. This ignorance can lead them to some unforeseen or unforced errors. Your connection with the expert, the Best Civil Lawyer In Kolkata, can help positively.
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Let’s take a close look at the significant differences between the two:
Definition of the Two terms:
An agreement is a mutual understanding between two or more parties about their rights. It may or may not be enforceable. So, a contract is a specific type of agreement binding and enforceable by law.
Formation:
An agreement can come into force verbally, in writing, or even through actions. It relies on the mutual consent of the parties involved. In contrast, a contract requires certain elements to be binding. It also includes the offer and acceptance, consideration, – and legal capacity of the parties: lawful object and intention to create legal relations.
Enforceability:
While agreements depend on mutual trust and understanding, they may not always hold up in court. It happens when one party fails to fulfill their obligations. Contracts are enforceable documents. The parties can seek legal remedies for breach of contract.
Specificity:
Agreements can be informal and may lack specificity obligations and responsibilities. They can be flexible and adaptable to changing circumstances. Contracts are more detailed and specific. They outline the rights and duties of each party in clear terms.
Consideration:
An agreement may or may not involve consideration. It depends on the nature of the arrangement. In contrast, consideration is a fundamental need for forming a contract. Without it, a contract may be considered void.
Legal Requirements:
Agreements do not have strict legal requirements. The contracts, on the other hand, meet specific criteria to prove their validity and enforceability. These requirements may vary depending on jurisdiction and the nature of the contract.
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The Bottom Line:
Both agreements and contracts involve mutual understanding between parties. The contracts differ due to their legal enforceability. It has specific requirements and formalities. Understanding the differences between the two is crucial for individuals and businesses to protect their rights and interests in legal transactions.
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