Expert explanation of the difference between an agreement and a contract

A contract is always based on certain agreements, which thus determine the content. According to contract law (freedom of contract), agreements can be made orally or in writing in a contract between the respective contractual partners. Contracts are regulated by the Civil Code and contract law.

Difference between contract and agreement

Contracts are therefore agreements with legal consequences. This means that a contractual agreement, for example the purchase of a certain item or taking out insurance, cannot be easily reversed.

• In some cases, the legislator provides for certain revocation options. If these deadlines have expired, the partner concerned can rightly insist on fulfilment.
• While for certain contracts (loans, leasing) there is the possibility of early termination in return for compensation, notice periods (insurance, financial investments) also play a role for others.

Only contracts are legally binding

• Not every agreement is a contract. That’s a key difference. If, for example, you arrange a meeting privately and make the commitment (promise) at a certain time, the partner cannot derive any legal claim from this if he does not show up. The court will not deal with such a case.


Place goods on a conveyor belt and pay, board a bus or give your loved one a bouquet of roses…

• The situation is different in the case of an agreement in the form of a contract. If special clauses are included that penalize non-performance or give rise to a claim for damages, then the court can, if necessary, be tried to enforce claims.
• The submission of a declaration of intent to conclude a purchase contract does not result in a legally significant transaction. A binding agreement to talk does not have to lead to contracts.

In tenancy law, the Civil Code knows, for example, the form tenancy agreement and the individual agreement. The difference between the two is that the latter is not presented to the tenant as a form, but that each point is negotiated individually. Higher requirements are placed on a pre-formulated rental agreement to protect the tenant.