Final answer:
A contract is a legally enforceable agreement between parties with mutual obligations, such as a patient agreeing to pay a surgeon for medical services. A gift is a voluntary transfer of property without expectation of return, like giving a birthday present. Contracts have legal recourse in noncompliance, while gifts do not.
Step-by-step explanation:
To distinguish between a contract and a gift, I'll start with definitions. A contract is a legally binding agreement between two or more parties that creates mutual obligations enforceable by law. In contrast, a gift is a voluntary and gratuitous transfer of property from one person to another without expecting anything in return. For example, if a skilled surgeon performs an operation on a patient with the understanding that the patient will pay for the services rendered, this is an example of a contract. The surgeon provides a service with the expectation of receiving payment, and failure to pay could result in a legal dispute where the surgeon can use the court system to claim the owed payment. On the other hand, if someone decides to present a friend with a birthday present without expecting anything in return, this act is an example of a gift. There is no legal obligation for the friend to reciprocate or provide anything in exchange for the gift received.