Is there any difference between these two phrases? Is there any context in which we only can use one rather than the other?
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My understanding is that in contrast is used to, well, contrast two ideas, or compare their differences. This does not imply that either idea is wrong, just that the two are contrasted.
The viewpoints are contradictory, but neither is necessarily correct.
On the contrary, however, is used when the writer or speaker wishes to emphasize a negative claim - that is, he brings a viewpoint that is explicitly not accepted, and the phrase is used to bring the alternate option:
This is the BEST answer I have ever found (http://public.wsu.edu/~brians/errors/contrary.html):
In contrast is used typically in the same way as on the other hand, when a writer is presenting two different views or making two different assessments, as in this example:
On the contrary would be inappropriate there. It is typically used to rebut an argument with some force, as in this example:
In contrast would be just as inappropriate there as on the contrary would be in the previous example.
Clearly, there is a difference between the two phrases and I don't think they are interchangeable.
In contrast notes that the second statement stands in opposition to or complement of the first, but that both are true:
On the contrary is used when denying something in the first statement.
While on the contrary is used when the second statement asserts and the first denies, we use in contrast with two things that exclude each other, if we are reporting on them as opinions held by others:
Because we aren't standing firmly behind either statement, but reporting on both. Our claim is that it is true that both opinions are held.
protected by tchrist Feb 21 '15 at 23:51
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