Covenant and agreement are two terms that are commonly used in legal documents and contracts. While they may seem interchangeable, there are significant differences between the two.
A covenant is a promise or an agreement that is made between two parties. It is a binding commitment that is enforceable by law. Covenants are usually found in legal documents such as deeds, leases, and employment contracts. A covenant sets out the terms and conditions of an agreement and describes what each party is expected to do. Covenants can be affirmative or negative. Affirmative covenants require a party to carry out specific actions, such as maintaining a property. Negative covenants, on the other hand, prohibit a party from taking certain actions, such as not using a property in a particular way.
An agreement, on the other hand, is a broad term that refers to any understanding between two or more parties. It may or may not be legally binding and may be oral or written. Agreements can be formal or informal and can cover a wide range of topics. A simple handshake agreement between two friends to split the cost of a pizza is an example of an informal, non-legally binding agreement. A formal agreement, such as a contract, is legally binding and enforceable by law.
The key difference between a covenant and an agreement lies in their enforceability. While both are promises made by two or more parties, only covenants are legally binding. Agreements, on the other hand, may or may not be enforceable, depending on the circumstances.
Another difference between the two is their scope. Covenants are usually more specific and narrowly defined, while agreements can cover a broader range of topics. For example, a covenant in a real estate contract may specify the exact uses of a property, while an agreement between two businesses may cover a wide range of issues, from pricing to intellectual property rights.
In conclusion, while covenant and agreement may seem like similar terms, they differ in their enforceability and scope. Covenants are legally binding promises that are specific and narrowly defined, while agreements can be legally binding or non-binding and are usually broader in scope. Understanding the difference between these two terms is important when drafting and interpreting legal documents and contracts.