All contracts are agreements but all agreements are not contracts.Comment
Answers
Explanation:
A contract is a legally binding agreement that exists between two or more parties to do or not do something. Due to this breach of the contract provide a legal remedy to the aggrieved party against the guilty party. So we can say that all contracts are an agreement but all agreements are not contracts
Contract = Agreement + Enforceability
Agreement = Offer + Acceptance
Therefore, Contract = Offer + Acceptance + Enforceability by law
According to Section 2, the Contract Act, “An Agreement enforceable by law is a contract.”
According to Section 10, All agreements are considered to be contracts if and only if they are made by the acceptance of the parties, competent to contract, for a legal contemplation and with a legalized object, and not hereby particularly declared to be void.
So, we can say that an Agreement is the first step of a valid Contract.
Essential elements of a valid contract:
- Agreement (Offer and acceptance)
- Legal relationship
- Capacity of parties
- Free consent
- Lawful object
- Lawful consideration
- Certainty
- Possible to perform
- Not declared as void
If any of the elements are not fulfilled then the Agreement cannot be termed as a Contract.
Therefor, we can say that Agreement is a broad term and is any agreement fulfill all the essential elements then it become a Contract.