DIFFERENCE BETWEEN AGREEMENT AND CONTRACT

DIFFERENCE BETWEEN AGREEMENT AND CONTRACT

Two friends agree to jog together every Saturday morning. They agree on the time, route and even buy matching joggers and T-shirts.

But after just one Saturday one of them stops showing up. Can you sue him? Of course not.

Why? Because what you both had was an agreement, not a contract.

In Nigeria, people often confuse these two terms, but they are not the same.

An agreement is a mutual understanding between parties. It involves offer and acceptance, like saying, “let us jog together,” and the other person replies, “alright.” But without more, that is just a social promise.

A contract is much more serious. It is an agreement that the law will enforce. For an agreement to become a contract four key things must be present:

1. Offer and Acceptance: One party proposes, the other agrees.

2. Consideration: Something of value must be exchanged, like money, goods or services.

3. Intention to Create Legal Relations: Both parties must intend for the deal to carry legal weight.

4. Legal Capacity: Each party must be mentally okay, an adult, not drunk or drugged.

So when you and your friend agree to attend each other’s weddings or help clean each other’s cars, there is no consideration or legal intention. That is an agreement, not a contract.

Every contract is an agreement but not every agreement is a contract.

Be sure before expecting legal protection.
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