Difference between Contract and Agreement | Law Exams
DIFFERENCE BETWEEN CONTRACT AND AGREEMENT
| Aspect | Contract | Agreement |
|---|---|---|
| Definition | A legally binding agreement enforceable by law. | A mutual understanding or arrangement between two or more parties. |
| Essential Elements | Offer, acceptance, consideration, intention to create legal relations, and capacity of the parties. | Offer and acceptance. |
| Consideration | There must be consideration while forming the contract. | Agreements can be formed without consideration. |
| Defined under | Section 2 (h) of the Indian Contract Act, 1872. | Section 2 (e) of the Indian Contract Act, 1872. |
| Enforceability |
Legally enforceable by the parties involved. | May or may not be legally enforceable. |
| Legal Obligations |
Creates legal obligations between the parties. | May or may not create legal obligations, depending on the intention. |
| Nature of Parties |
Parties can be individuals, companies, or entities. | Parties can be individuals, companies or entities. |
| Legal Consequences | Breach of contract may lead to legal remedies or damages. | Breach of agreement may not have the same legal consequences as a contract |
| Written/Formal Requirement | Some contracts must be in writing and comply with specific formalities. | Agreements can be oral or written, and formalities may not be necessary. |
Registration | Some contracts require registration, e.g., sale of immovable property | Agreements generally do not requure registration. |
| Mutual Consent |
Requires mutual consent of the parties involved. | Requires mutual consent of the parties involved. |
| Intention to be Legal | Must have an intention to create legal relations. | May or may not have an intention to create legal relations. |
Essentials of Formation of Contract | Law Exams
Initially, there are two components which form the basis of a contract. They are,
- An Agreement
- Its enforceability by law
Agreement:
An agreement consists of proposal or an offer by one party and its acceptance by another party. It also implies that the parties have a common intention about the subject-matter of the agreement. Two parties must be thinking the same thing in the same sense. Thus agreement is the outcome of the two consenting minds, i.e.,"consensus ad idem".
According to Section 2(e) of the Indian Contract Act, 1872
Agreement is defined as "every promise or every set of promises forming the consideration for each other".
According to Section 2(b) of the Indian Contract Act, 1872
When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise.
Enforceability of Agreement by law:
Agreements based on its enforceability by law are of two types-
- Unenforceable agreement
- Enforceable agreement
All agreements to become a contract must be enforceable by law. Enforceability by law in contracts refers to the ability of a contract to be legally binding and upheld in a court of law. When parties enter into a contract, they typically have certain rights and obligations outlined in the agreement. Enforceability ensures that if one party fails to fulfill their obligations or breaches the contract, the other party can seek legal remedies to enforce the terms of the agreement.
“All contracts are agreements but all agreements are not contracts.”
ESSENTIAL ELEMENTS OF A VALID CONTRACT:
According to Section 10 of the Indian Contract Act, 1872
All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void.
In order to become a valid contract, an agreement must consist of the following essential elements,
- Offer and Acceptance
- Lawful Consideration
- Capacity of the partners
- Free Consent
- Lawful object
- Agreements Not Expressly Declared Void
- Possibility Of Performance
What is a contract? | Law Exams
WHAT IS A CONTRACT?
A contract is an agreement between parties that creates mutual obligations that are enforceable by law. It is a binding agreement between two or more parties.It can also be described as "a set of enforceable promises, either written or oral."
For example,
1) When we buy a product at a store, we are entering into an agreement to purchase whatever it is we are purchasing.
2) When we get a new job, we sign an employment agreement to start work.
According to Section 2(h) of the Indian Contract Act, 1872
Contract is defined as an agreement enforceable by law.
From this definition, we find that a contract essentially consists of two elements i.e. an agreement and legal obligation i.e. a duty enforceable by law.
According to Pollock, Every agreement and promise enforceable by law is a contract.
According to Salmond, A contract is an agreement creating and defining obligation between two or more persons by which rights are acquired by one or more to act or forbearance on the part of others.
According to Cambridge Dictionary, Contract is a legal document that states and explains a formal agreement between two different people or groups, or the agreement itself.
THE INDIAN CONTRACT ACT, 1872
The Indian Contract Act of 1872, which dates back to that year, is one of the nation's first laws governing business. On September 1st of same year, the Indian Contract Act 1872 was passed. Except for Jammu & Kashmir, practically all of India's states were covered by the statute.
The primary legislation governing all contracts made in India is Indian contract law. The law is broken down into 266 sections. In the upcoming articles, we shall learn more about them.
WHAT IS THE PURPOSE OF A CONTRACT?
Contracts are like promises that people make to each other and legally bind themselves to follow. They help ensure fairness, protect rights, and provide a way to resolve disputes if promises are broken.
Contracts are made between two or more people, like a promise or agreement. They can be made between individuals, companies, or even governments. It's a way for people to agree on what they will do and what they expect from each other.
Read more: Essentials of Formation of Contract
Critically Endangered Species of India- The Gliding Frog | UPSC
CRITICALLY ENDANGERED SPECIES
(C) REPTILES AND AMPHIBIANS:
4.The Gliding Frog (Rhacophorus pseudomalabaricus)
 |
| The Gliding Frog |
The Gliding Frog (Rhacophorus pseudomalabaricus) is endemic to the Western Ghats. This species is confined to the rain forests of the Western Ghats and occurs at elevations of greater than 1000m. This species has been recently described in the year 2000.
CONSERVATION STATUS: Critically Endangered.
HABITAT: Rainforests above 1000m altitude.
DISTRIBUTION: Indira Gandhi National Park and surrounding areas of Anamalai hills, Tamil Nadu.
THREATS: Conversion of forested areas for timber and non-timber plantations, and timber extraction activities.
ALSO READ: Four-toed River Terrapin
Critically Endangered Species of India- Four-toed River Terrapin | UPSC
CRITICALLY ENDANGERED SPECIES
(C) REPTILES AND AMPHIBIANS
3. Four-toed River Terrapin or River Terrapin (Batagur baska)
 |
| Four-toed River Terrapin |
Four-toed river terrapin or Northern River terrapin (Batagur baska) is a critically endangered turtle. The omnivorous diet of the river terrapin and other terrapin species, makes them an essential part of the effi cient clean-up systems of aquatic habitats.
CONSERVATION STATUS: Critically Endangered.
HABITAT: Freshwater rivers and lakes.
DISTRIBUTION: Bangladesh, Cambodia, India, Indonesia, Malaysia.
THREATS: Use of flesh for medicinal purposes, demand for eggs, which are considered a delicacy.
ALSO READ: Leatherback turtles.
Critically Endangered Species of India- Leatherback turtles | UPSC
CRITICALLY ENDANGERED SPECIES
(C) REPTILES AND AMPHIBIANS:
2. Leatherback Turtles (Dermochelys coriacea)
 |
| Leatherback Turtles |
Leatherback turtles (Dermochelys coriacea) are the largest of living sea turtles weighing as much as 900 kg. Adult leatherback turtles are excellent swimmers – they swim on an average of 45-65 km a day, travel upto 15,000 km per year and can dive as deep as 1200 m.
Jelly fish are their primary prey. The population spikes of leatherbacks coincide with abundance of
jelly fish, making them important top-predators in marine environments.
CONSERVATION STATUS: Critically Endangered
HABITAT: Tropical and subtropical oceans.
DISTRIBUTION: Found in tropical and temperate waters of the Atlantic, Pacific, and Indian Oceans.
THREATS: High sea fi shing operations, harvesting of eggs, destruction of nests by wild species
and domesticated species such as cats, dogs and pigs. Artifi cial lighting disorients hatchlings and
adult and causes them to migrate inland rather than back to the sea. Threats to habitat include
construction, mining and plantation of exotics.
ALSO READ: The Gharial
Critically Endangered Species of India- Gharial | UPSC
CRITICALLY ENDANGERED SPECIES
(C) REPTILES AND MAMMALS:
1. The Gharial
The Gharial (Gavialis gangeticus) is the most uniquely evolved crocodilian in the world, a specialized river-dwelling fish-eater.
The dire condition of the gharial reflects the tragedy of our rivers where we stand to not only lose other endangered taxa such as the Ganges river dolphin (Platanista gangetica) but also the use of their waters for human consumption and other needs.
CONSERVATION STATUS: Critically Endangered
HABITAT: Clean rivers with sand banks.
DISTRIBUTION: Only viable population in the National Chambal Sanctuary, spread across three States of Uttar Pradesh, Rajasthan and Madhya Pradesh in India. Small non-breeding populations exist in Son, Gandak, Hoogly and Ghagra rivers. Now extinct in Myanmar, Pakistan, Bhutan and Bangladesh.
THREATS: The combined effects of dams, barrages, artificial embankments, change in river course,
pollution, sand-mining, riparian agriculture and ingress of domestic and feral livestock caused
irreversible loss of riverine habitat and consequently of the gharial.
ALSO READ: The Pygmy hog