In civil and other legal literature, the categories of contract and agreement are considered to be synonymous. However, there are a number of differences between the two concepts, the analysis of which reveals their properties. In legal scholarship, it is generally accepted that an agreement and a contract relate as general and private. This suggests that all contracts are agreements but not all agreements are contracts.
Contracts are concluded by the parties to agree on the counteractions to satisfy their interests. That is, each party to a contract has its own goal. At the same time, the persons concluding the agreement move towards achieving a single common goal without creating an independent civil legal relationship. A contract always presupposes the existence of a specific obligation that arises for the parties to the transaction. At the same time, the rules of law may describe in detail the essence of a particular obligation, the limits of the exercise of rights, and the performance of obligations by the parties. Agreements do not have to contain all the terms in such a detailed way.
When comparing the categories of contract and agreement, the form of the concluded transaction is an important factor, although it is not always a qualifying feature of the legal status. The existence of a contract in a written form guarantees protection in court proceedings, unlike an oral agreement. Suppose the parties have decided to verbally stipulate the terms without enshrining them in written or electronic form. In that case, the subsequent relations are built on trust in the fulfillment of all obligations without any legal guarantees. Whereas the contract, as a general rule, should sometimes be concluded in written form, and non-compliance with this rule can be the reason why an agreement can be recognized as not being concluded at all.
In addition, the existence of a contract with the conditions set out in it contributes to the court’s correct decision on the merits of the complaint. It also becomes possible to determine the appropriate remedy if one of the parties fails to fulfill its obligations. Moreover, the process of proving in court in the presence of a document will be many times easier. The list of situations in which agreements are concluded is much broader than the cases in which a contract is executed. Accordingly, the requirements for agreements are not so strict due to the variety of forms and situations in which it is necessary to apply them. It is precisely here that the semantic interconnection of these two notions emerges. It is important to remember that not all relationships involve the same civil law regulation, and the rules on transactions and contracts are unlikely to apply to any agreement.
An agreement is not necessarily a contract since it has been concluded in another form and the standard procedure for challenging contracts applies to it, for example. However, by concluding a contract, the parties agree on the basic conditions and on important legal details. In contrast to a contract, an agreement may assume any consensus between the parties. It may both presuppose specific obligations of the parties and determine only the general features or principles of future agreements. Thus, an agreement and a contract relate as general and particular. Every contract will be an agreement, but not every agreement will be a contract.
References
- Y Zaremba, ‘Agreement vs Contract: What’s the Difference?’ (JD Supra, 2021). Web.
- J Murray, ‘What Kinds of Business Contracts Must Be in Writing?’ (The Balance, 2020). Web.
- J Murray, ‘The Basics of Business Contracts and Agreements’ (The Balance, 2021). Web.
- E Allcock, ‘Agreements vs Contracts: What are the Differences?’ (Enable, 2021). Web.