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Is a Contract and an Agreement the same thing?

An agreement and a contract are similar concepts, but they are not the same.


A contract (like a deed) is a type of agreement. Contracts are recognised by and enforceable at law. On the other hand, an agreement that does not satisfy the elements of a binding contract is not legally binding.


Usually, the element that is missing in an agreement which means that it does not amount to a legally binding contract, is an intention to create legal relations.


For instance, you may reach an agreement with your family member. If the agreement was intended to create a legally binding relationship between the parties, and meets the other elements of a contract, it will be legally enforceable. If the agreement is not intended to be legally binding, it is an agreement and nothing more.


Contract and an Agreement
Contract and an Agreement

Author: Farrah Motley, Legal Principal of Prosper Law, an Australian Commercial Law Firm.



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