All Contracts Are Agreements but Not All Agreements Are Contracts

Topics: Contract, Law, Void Pages: 2 (711 words) Published: November 25, 2012
According to section 2(a) of Indian Contract Act states that, "every promise on every set of promises forming the consideration for each other an agreement. An agreement is a form of cross reference between different parties, which may be written, oral and lies upon the honor of the parties for its fulfillment rather than being in any way enforceable. It is also a fact that an agreement is a proposal and its acceptance, by which two or more person or parties promises to do abstain from doing an act. But a contract according to section 2(h) of the Indian Contract Act, "An agreement enforceable by law is a contract. It is clear these definitions that the two elements of a contract are: (a) Agreement Contractual Obligation

(b) Enforceability by Law.
For Example: X invites his friend to coffee and the latter accepts the invitation. This is a social agreement not a contract because it does not imply any legal obligation. We can say that:
(a) All contracts are agreements,
(b) But all agreements are not contracts.
(a) All Contracts are Agreements
For a Contract to be there an agreement is essential; without an agreement, there can be no contract. As the saying goes, "where there is smoke, there is fire; for without fire, there can be no smoke". It could be said, "Where there is contract, there is agreement without an agreement there can be no contract". Just as a fire gives birth to smoke, in the same way, an agreement gives birth to a contract. Another essential element of a contract is the legal obligation for the parties to the contract; there are many agreements that do not entail any legal obligations. As such, these agreements cannot be called contracts. For Example:

A gives his car to B for repair and B asks for Ksh. 2000 for the repair works. A agrees to pay the price and B agrees to repair the car. The agreement imposes an obligation on both. The third element of a contract is that the agreement must be enforceable by Law. If one party fails to keep...
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