Differences between Contract and Agreement

Part 1 Differences between Contract and Agreement

Definition - Contract vs. Agreement

An agreement entails any arrangement or understanding between two or more parties about their responsibilities and rights in respect to one another. Such informal arrangements occur in the form of "gentlemen's agreements" where the adherence to the terms of the agreement depends on the honor of the parties rather than exterior means of enforcement.

A contract, on the other hand, refers to a specific type of agreement that has to meet particular requirements made to develop legally binding obligations between the parties, and are enforceable by the court of law.

Requirements- Contract vs. Agreement

In the agreement, the parties will only need to come to a common understanding of their relative rights and responsibilities; what is often called "meeting of the minds." The requirements for meeting a contract are comparatively stricter and are more precise. The contract must contain some special elements such as:

• Offer and acceptance: every contract must include a certain offer and the acceptance of that offer.
• Mutual consent: the offer must be agreed by both parties, all parties must agree to similar terms, and all must accept a binding agreement to be made.
• Consideration: Consideration refers to something of value that is exchanged between the parties, and it can be in the form of goods, money or services. Both parties must offer something of value for the contract to be made.
• Competence: Both parties must comprehend and understand what the contract entails. No person can be a minor, under the influence of alcohol, drugs or mentally deficit in a way that would prevent the understanding of the underlying terms.
• Legal Purpose: The purpose of the law must fall within the confines of legal conduct.

Benefits - Contract vs. Agreement

The primary advantage of an agreement is that it is inherently informal. Where the agreeing parties share a considerable degree of trust, the agreement can save time and allow for more suppleness in the fulfillment of the agreed obligations. Agreements may also be viable where the drafting of a contract would prove prohibitively burdensome on both parties.

The major advantage of contracts is that they spell out the terms that the parties have agreed on, and if breached, it can serve as a guide to the court of law. A contract offers some assurance that the obligations entered into under the contract will be fulfilled as the party intended. Contracts provide an added protection, and they are advisable in any official business or commercial matter.

Writing and Registration - Contract vs. Agreement

Agreements are usually oral in form, and they do not require any registration however some agreements can be created in writing form.

Contracts need to be in writing but not always. They are also registered so that they can be proved in legal grounds.

The Scope - Contract vs. Agreement

The scope of an agreement is wider than a contract since it covers all types of an agreement. In contrast, the scope of a contract is narrower than an agreement since it only entails the agreement that has a legal enforceability.

Part 2 The Best Tool to Sign Contract and Agreement

Perhaps you are wondering if you can sign your contracts in digital formats. As a matter of fact you can! You could use e-signature software to create wet-like signatures on your contracts and make them legally binding, fast. SignX is one of the best software that you can use to sign your contracts and agreements electronically. The tool is fast and has a perfect interface which is easy for the users to navigate through. SignX has a variety of features that make it an excellent choice for any institution or business.

Try SignX for Free

• If you want to ensure security to your sensitive documents, SignX offers a two-factor authentication for you. You can use a unique code or password to provide a secure end to end interaction with your clients.
• The centralized dashboard enables you to have a high-level view of your entire account activities.
• You can use the reusable templates provided by SignX to help personalize documents for individual recipients.
• SignX gives you one of the strongest encryption protocols and great recovery plan to help keep your documents safe.
• You can access your documents anywhere anytime, and you can follow the movement of signatures and the ongoing process anywhere for your comfort.
• With the current most demanding regulations, SignX helps you sign legally binding contracts thus ensuring the highest level of compliance.
• SignX ensures that you get notifications in real time, every time your document I opened, signed or read.
• SignX offers you chances to add or remove multiple users by your single admin account.