These two get mixed up constantly. Save this for the next time someone throws both terms around in a meeting. Quick check: Your Steering Committee is arguing over who can approve a major change. Which document would you check first? A. Project Charter B. Terms of Reference C. Project Plan Check Your Answer is correct at the bottom of the text Here's the clear version: A project charter is the document that formally gets the project off the ground. It sets out the high-level picture in one place: the objective, what is in scope and out, the key assumptions and risks, who is involved, and the budget and timeline at a high level where these are known. Its main job is to authorise the project and give everyone a shared starting point. When someone asks, "What is this project actually about, why are we doing it, and what have we agreed?" the charter helps answer that. A terms of reference is different. It usually sets out how a specific group involved in the project will work and govern its part of the project. That might be a Steering Committee, Project Board or working group. It covers things like the purpose of the group, who sits on it, what authority it has, what people are responsible for, how decisions get made, how often the group meets and what counts as a quorum. Less "what is this project?" More "who decides what, and how will this group operate?" So the charter defines and authorises the project at a high level. The ToR defines how a governance group works, who has authority and how decisions are made. An easy way to hold the difference: Charter = what, why and high-level agreement. Terms of Reference = who decides, what they are responsible for and how they operate. One important thing though: organisations do this differently. Some may not use a document called a Project Charter at all. You might see similar information sitting inside a Project Brief, PID, Business Case or another initiation document. The same applies to Terms of Reference. Some organisations use them heavily. Others barely use the term.