An agreement is a general term for a mutual understanding between parties, whether or not it's legally binding. It's like an understanding between friends to meet at a specific time.

A contract is a legally enforceable agreement.if someone agrees to sell a bicycle to a friend for a specific amount on a certain date, and both parties sign a document outlining these terms – that signed document is a contract. In essence, a contract is a more formal and legally recognized type of agreement.