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Contracts Vs Agreements

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Eugene Embalzado Jr.
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44 views2 pages

Contracts Vs Agreements

Uploaded by

Eugene Embalzado Jr.
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Contracts vs.

Agreements

Both forms—a contract and an agreement—represent specific arrangements between two or more
entities. The main differences lie in their flexibility and enforceability: 

1. Agreements are usually informal arrangements where the parties agree to do or not to do
something. It’s enough for all entities involved to understand their rights and duties, while the
adherence to the proposed terms depends solely on their honor. Agreements usually have no
legal force and can’t be used as evidence in court since they don’t contain all the elements that
contracts do

2. Contracts are formal and legally binding agreements. They list strictly determined terms and
conditions the parties must adhere to. The entities involved can use them as supporting
evidence if one of them fails to comply with the rules

What Requirements Do Contracts and Agreements Have To Meet?

Check out the table showing specific criteria agreements and contracts have (or don’t have) to meet: 

Criteria Agreements Contracts

Being in writing No Usually no, unless it’s a contract that:

 Requires more than a year to be performed

 Involves land or real estate sale

The best way to check whether your state requires a


written contract is to check its current laws

Containing No specific  Particular offer


predetermined requirements
 Acceptance of the offer
elements
 Consent by all/both parties

 Consideration—The parties should exchange


something valuable, such as financial assets,
specific services, etc.

 Competence—For a contract to be valid, the


parties must be:

o Of legal age

o Of sound mind

o Sober

 Legal purpose—The contract mustn’t be related


to anything illegal, such as drugs, thefts,
prostitution, etc.

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