Agreement vs. Contract—What Is the Difference?

Standardized Legal Documents Agreement vs. Contract—What Is the Difference?

Agreement vs. Contract—Differences Explained

Many people, including lawyers, often use the terms contract and agreement interchangeably. Even though these two have certain similarities, they can’t be used as synonyms. To determine which form is more appropriate for your needs, you should get familiar with the main differences between them. 

In this guide, we will make an agreement vs. contract comparison and help you understand the basics of each term. You will also learn how to draw up your legal documents within minutes with DoNotPay’s contract templates!

What Is the Difference Between a Contract and an Agreement?

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: 

Being in writingNoUsually no, unless it’s a contract that:

  • Requires more than a year to be performed
  • Involves land or real estate sale
  • Is related to the sales exceeding $5,000

The best way to check whether your state requires a written contract is to check its current laws

Containing predetermined elementsNo specific requirements
  • Particular offer
  • Acceptance of the offer
  • 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:
    • Of legal age
    • Of sound mind
    • Sober
  • Legal purpose—The contract mustn’t be related to anything illegal, such as drugs, thefts, prostitution, etc.

How To Create a Contract or an Agreement

There are three ways to create a legal document:

  1. Write a contract yourself. While this option is free of charge and may look simple, it imposes important rules you must follow in drafting a proper document. You must:
    • Use specific legal terms, which is difficult if you don’t know much about the law
    • Be familiar with the governing laws in your state and align each section in your contract or agreement with them
    • Avoid technical, grammatical, and spelling errors since they can make your legal document useless
    • Include as many relevant clauses as possible to prevent misunderstanding between the parties involved
  2. Have your document drafted by a lawyer. Even though it’s one of the most secure options, this method is quite pricey. Not everyone can afford to spend hundreds or thousands of dollars on attorneys
  3. Find suitable online templates. Many people choose this option since it’s usually free and accessible. The bad news is—the templates aren’t always adapted to state laws or are not specific enough

Entrust Your Legal Documents to Our Virtual Lawyer

Whether you need to create a contract or an agreement, your document must be well-written and contain all necessary clauses to be valid. Some are easy to compose, but others require more attention and legal expertise. 

The good news is—the drafting process doesn’t have to be complicated! DoNotPay features a special template database you can use to create a personalized contract or agreement in a snap

You can do it in three simple steps: 

  1. from any preferred web browser
  2. Look for the desired template
  3. Enter the details we should include in your contract

All that remains is to download your customized document, sign it, and have it notarized! Our app enables you to arrange a virtual meeting with a notary and get your contract or agreement notarized without leaving your home

That’s not all—you can also fax your document to any number from your preferred device and avoid old and outdated faxing methods!

What Legal Documents Can DoNotPay Generate?

and access all our document templates, including:

Do you want to compose a document that isn’t on our list? We will give you plenty of useful tips for drawing up the:

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