When you are in the midst of all the paperwork it is sometimes hard to distinguish between a grant and a contract.
Many grants do look and feel like contracts, and vice versa.
Nonetheless, it is important to remember the conceptual differences and the operational differences, because they can trigger substantial differences in procedure, in paperwork, and ultimately in legal responsibility. The key difference in practice is that grants are intended to assist an activity the sponsor wants to encourage, whereas contracts are meant to secure something the sponsor wants for its own use. Thus the Catalog of Federal Domestic Assistance refers to grants and the Federal Acquisition Regulations refer to contracts. Once it is clear that the sponsor intends to procure rather than assist , three important changes take place. Universities and faculty members are not always familiar with these issues.