What is the difference between a covenant and a contract?

The difference between a covenant and a contract lies in the number of parties involved in the agreement, the legal nature of the agreement and the legal effects of a breach of the agreement. A covenant is an agreement between two parties to do or refrain from doing something. In the state of Hawaii, a covenant is legally binding if it meets certain criteria, such as having consideration, meaning something of value has been exchanged between the parties. A covenant must also be supported by valid consideration in order to be enforceable. A contract is an agreement between two or more parties that creates a legally binding relationship between them. In the state of Hawaii, a contract must also meet certain criteria to be enforceable, such as having consideration, consent of all parties and a clear understanding of the obligations of each party. Additionally, a contract must have “legal capacity”, meaning that all parties must be legally competent when entering the agreement. The main difference between a covenant and a contract is that a covenant involves only two parties and is more of a moral obligation, while a contract involves more than two parties and is legally binding. A breach of a covenant will normally entitle the victim to damages, whereas a breach of a contract can lead to more serious repercussions, such as the termination of the agreement and potential legal action.

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