Agreements and Contracts
Difference between Agreements and Contracts
Upon successful completion of this module, you will be able to:
Understand the global nature of the project delivery process, giving particular attention to professional design, documents and administration of a contract.
Acquire insight into developing a personal, professional bearing and career ethics.
Grasp the intent and nature of contracts, and relationships between contracting parties.
Develop skills in critical thinking and analytical judgment related to the development and execution of consultant and agreements.
Comprehend the general aspects of the conditions of a contract for engineering and their effect on the process.
Recognize the purpose, structure and interfacing of specifications with the contract documents, and their importance to a project.
Know the various roles and responsibilities for those participating in the administration of a contract.
Develop participatory skills and comprehend the details about professional engineering design in relationship to the contract documents and administration.
An agreement is any understanding or arrangement reached between two
or more parties. A contract is a specific type of agreement that, by its
terms and elements, is legally binding and enforceable in a court of
Agreement is an arrangement (usually informal) between two or more parties that is not enforceable by law. An agreement that lacks any of the required elements of a contract has no legal effect.
A contract is a formal arrangement between two or more party that, by its terms and elements, is enforceable by law. A contract is legally binding. In order to reach an agreement, parties need only come to a common understanding as to their relative rights and responsibilities, what is often termed a “meeting of the minds.” The requirements for the formation of a contract are more precise and comparatively stricter. A contract must contain the following essential elements:
Offer and Acceptance: Every contract must include a specific offer, and the acceptance of that specific offer.
Mutual Consent: The offer and acceptance must be freely consented to by the parties, without coercion. All parties must agree to the same terms, and all must intend for a binding agreement to be formed.
Consideration: This is something of value that is exchanged between the parties. Consideration can take the form of money, goods, or services, but both parties must provide something of value for a contract to be formed. If only one side provides something, it is a gift, not a contract.
Competence: Both parties must comprehend the situation and understand what the contract will entail. Thus, no party can be a minor, under the influence of drugs or alcohol, or mentally deficient in a way that would prevent them from understanding the terms of the contract. A non-competent party to a contract may disavow the contract, which would render it void.
Legal Purpose: The purpose of the contract must fall within the confines of lawful conduct. In other words, a court would never enforce a contract regarding.