What does "agreement" mean in the context of a legal contract?

In the context of a legal contract, "agreement" refers to the mutual intent between the offeror (the person making the offer) and the offeree (the person receiving the offer) to enter into a legally binding arrangement. For an agreement to be valid, both parties must share a common understanding of the terms and conditions. This shared intent signifies that both parties accept the offer and intend to be bound by its terms, forming the foundation of a contract.

Understanding this concept is fundamental in contract law because it establishes the basis for enforceability. If one party believes that an offer has been accepted, but the other does not share that belief, a genuine agreement may not exist, which could render the contract invalid. Therefore, recognizing the importance of mutual intent is essential for anyone engaged in the creation or assessment of contracts.