An employment offer letter extends the invitation to join you and your team but does not bind either party to any of the offered terms. An employment contract—on the other hand—is a legally binding agreement between the employer and the employee. It outlines all details of employment in great detail and binds each party to all of the terms listed in that agreement.
Unlike an offer letter, which often includes a disclaimer that it is not a legally binding contract, the purpose of an employment contract is to outline and bind the parties to the details listed in it. Contractual agreements are subject to contract law and are enforceable between the parties.