What Is the Difference Between a Contract and an Agreement?

summitgeneralcounsel
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Many people use the terms contract and agreement interchangeably, but they are not always the same.An agreement is generally a mutual understanding between two or more parties. A contract is a legally enforceable agreement that includes essential elements such as an offer, acceptance, consideration, legal capacity, and a lawful purpose.Understanding the difference can help businesses create clearer documents and reduce confusion when entering commercial relationships.

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