An agreement is an expression of mutual understanding between two or more parties, while a contract is a legally binding document containing specific terms and conditions. In other words, an agreement signifies consent to do something, while a contract creates legally enforceable obligations. It is important to note that both agreements and contracts must be made in good faith, with each party agreeing to perform their part in the transaction as stated. However, only contracts have the legal backing to enforce parties to act in accordance with the document’s stipulations.