Legal Definitions - simple agreement

Definition: A simple agreement is a mutual understanding between two or more people about their rights and duties regarding past or future performances. It is a manifestation of mutual assent by two or more persons. The parties' actual bargain is found in their language or by implication from other circumstances, including course of dealing, usage of trade, and course of performance.

Example: An accepted invitation to dinner is an agreement, but it is not a contract because it does not create any legal obligation between the parties. A conveyance of land or a gift of a chattel, though involving an agreement, is not a contract because its primary legal operation is to effect a transfer of property, and not to create an obligation.

Explanation: The example illustrates that not every agreement is a contract. An agreement can be any arrangement between two or more persons intended to affect their relations, whether legal or otherwise. However, for an agreement to be a contract, it must create a legal obligation between the parties. A conveyance of land or a gift of a chattel involves an agreement, but it is not a contract because its primary legal operation is to effect a transfer of property, and not to create an obligation.