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The word agreement can be broadly defined as any understanding reached between two or more minds. An agreement is, most of the time, informal and can even be completed with a handshake.
As a legal term, an agreement can be a little more complicated. Legally, an agreement is the union of two or more parties into an arrangement of mutual obligation.
It requires an offer and an acceptance, can often be informal and may even lack some of the legally binding terms normally included in contracts.
In fact, to reach an agreement the parties involved only need to come to an understanding as to what their rights are and obligations will be.
To make this even more confusing, some contracts are actually called agreements. Examples include Licensing Agreements, Employment Agreements and Non-disclosure Agreements.
There are various classifications of agreements in law. The most common include:
- Conditional Agreements – An agreement that hinges upon certain actions, facts or conditions being met.
- Executed Agreements – An agreement that has been closed and conveys a past event or circumstance.
- Executory Agreements – This agreement is to be carried out on some future date and is the precursor to a formal contract.
- Express Agreements – These agreements are explicit and contain all of the conditions affirmed by the parties.
- Implied Agreements – An agreement where there is a promise to carry out a legal obligation.
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