Contract

They are two type of essential elements of a contract:

1. An Agreement.
2. Its enforceability by law.

These two components together constitute the basis for a contract and are explained as follow:


    1. Agreement. An agreement is defined in section 2 (e) as "every promise or every set of promises forming the consideration for each other."
    A promise is defined  in section 2 (b) as, "a proposal when accepted become a promise."

An Agreement involves proposal or offer by one party and acceptance of the same by the other party.it requires existence of two or more persons.

It also implies that the parties have a common intention about the subject-matter of their agreement. Two parties be thinking of the same thing in the same sense at the same time. Thus agreement is the outcome of two consenting minds i.e. 'consensus ad idem.'


Agreements are two types :

1. Un-enforceable Agreement.
2. Enforceable Agreement.

1. Un-enforceable Agreements :

    All those agreements are said to be un-enforceable in which an aggreived party can not go to a law court and that is left at the mercy of the parties only. It is a gentleman's promise which may or may not fullfiled by the promiser.

All these agreement remain only an agreement between the parties and they never become a Contract in the eyes of laws, because they are merely social or domestic arrangments.

  2. Enforceable Agreements :
    All these agreements are said to be enfoceable in which the aggreived party has a right to approch a law court to get the agreement enforced and the other party is held liable either to perform the agreement or to face the consequence for breach of that agreemen. all these agreement which are enforceable at law are "Contracts".

It implies that un-enforceable agreements remain agreemants only and cannot be converted into a valid contract and only enforceable agreements are converted into a valid contract. Therefore we can conclude that :
"All contracts are agreements but all agreements are not "contract".

  2. Enforceable at law.   All agreements to become a contract must give rise to legal obligations. The common acceptance formed and communicated between the two parties must creating leagel relationsand not merely the relations which are purely social or domestic in nature.


Thus, Contract= Agreement + Enforceability at law

Therefore, all contracts are agreement but all agreements are not contracts.