Agreement: Definition, Example and Related Terms
What is an Agreement ?
An agreement is a simple way of saying that two or more parties have come to a mutual understanding about something. This could be about any topic, and it's usually about what each party will do or not do in the future. It's like when you and your friend agree to meet at the park at 3pm. You both have a mutual understanding that you'll be at the park at that time, and if you're not, there might be consequences, like your friend being upset.
But in the world of contracts, an agreement is a bit more serious than that. It's a key part of a contract, and it usually involves more than just saying 'yes' to something. It involves an 'offer' and an 'acceptance'. An 'offer' is when one party proposes something to another party, like selling a car for a certain amount. The 'acceptance' is when the other party agrees to the proposal. If there's no agreement, there's usually no contract. And unlike meeting your friend at the park, the consequences for not following through could be much more serious, like being sued.
Scenario Description Selling a Bicycle John offers to sell his bicycle to Mary for $100. Mary accepts the offer. They have an agreement. Hiring a Graphic Designer A company offers a job to a graphic designer with specific terms about pay and work hours. The designer accepts the offer. They have an agreement. Leasing a Car A car dealership offers to lease a car to a customer for a certain amount per month. The customer accepts the offer. They have an agreement.