What is the difference between contract and agreement?
Contract and agreement look like synonyms in document names. The document regulating the relationship between employer and employee can be called either employment contract or employment agreement. There is no difference between the two in this respect.
However, there is a major difference between the two terms in the common law, contract being a legally binding and enforceable agreement between two parties. A contract is made through offer and acceptance, and requires consideration to be legally enforcible.
An agreement is a manifestation of mutual assent by two or more persons to one another. It may be a gentlemen's agreement, which has no legal effect, it is simply the power of a given word. But agreement may also be enforcible if it complies with the requirement of a contract. In this case, the agreement will be considered by the court to be a contract, no matter what word is used to designate it.
In summary we may conclude that this issue is divided along the line of formal and substantive difference between the two terms. Formally, as in documents name, references or everyday usage, there seems to be no difference, but if we look at the meaning in depth, there is substantive difference between them. HOwever, jurisdictions differ on their use of "agreement" in denoting a legally enforceable contract.
