What is Agreement?

An agreement is a mutual understanding or promise between two or more persons, where one party makes an offer and the other accepts it. Agreement and Contract Drafting.

📘 Legal Definition (Indian Contract Act, 1872)

Section 2(e) states:

“Every promise and every set of promises, forming the consideration for each other, is an agreement.”

🧠 Simple Explanation

👉 When one person offers something and another person accepts it, an agreement is formed.
👉 An agreement may or may not be legally enforceable.

🔑 Essential Elements of an Agreement

Two or more parties

Offer by one party

Acceptance by the other party

Mutual promises

📝 Example

A promises to sell his car to B for ₹5 lakh

B accepts the offer

✔ This creates an agreement
✔ If all legal requirements are fulfilled, it becomes a contract

All contracts are agreements but All agreements are NOT contracts

What is Contract?

A contract is an agreement that is legally enforceable by law.

📘 Legal Definition (Indian Contract Act, 1872)

Section 2(h) defines a contract as:

“An agreement enforceable by law is a contract.”

🧠 Simple Meaning

👉 When an agreement fulfils all legal requirements, the law recognizes it and enforces it—then it becomes a contract.

🔑 Essential Elements of a Valid Contract (Section 10)

Offer

Acceptance

Lawful consideration

Lawful object

Free consent

Competent parties

Not expressly declared void

Agreement and Contract Drafting

📝 Example

A agrees to sell land to B for ₹10 lakh

Both parties consent freely

Object and consideration are lawful

✔ This is a contract, enforceable in court.

📌 Key Difference (Quick Recall)

All contracts are agreements, but all agreements are not contracts.

When Agreements are Contracts?

Only those agreements which are legally enforceable by law are called contracts.

📘 Legal Position

Under Section 2(h) of the Indian Contract Act, 1872:

“An agreement enforceable by law is a contract.”

So, every agreement is not a contract—only certain agreements qualify.

✅ Agreements That Become Contracts

An agreement becomes a contract when it fulfils all essentials of Section 10, namely:

Offer and acceptance

Lawful consideration

Lawful object

Free consent

Competent parties

Not expressly declared void

📝 Example

A agrees to sell goods to B for ₹50,000

Both are majors, consent freely

Object is lawful

✔ This agreement is enforceable
✔ Hence, it is a contract

Agreements That Are NOT Contracts

These agreements do not become contracts:

Social or domestic agreements (no intention to create legal relations)

Agreements without consideration (with limited exceptions)

Agreements with unlawful object or consideration

When agreements with minors

Agreements expressly declared void

Disclaimer: This article is for educational and informational purposes only. It provides a general understanding of legal remedies but does not constitute legal advice. For specific legal guidance, you can consult a legal expert.