Agreement.

                                                                         What is Agreement?

According to section2(e) of the Indian Contract Act, "every promise and set of promise, forming consideration for each other, is an agreement".

Thus an agreement is create by exchange of promises by the parties. It means an agreement is created when one person proposes to another and the another person accepts it.

Any proposal when accepted becomes an agreement between the parties, irrespective of the fact whether it is enforceable by the law or not enforceable.

What is Agreement?

Section2(h) of the Indian Contract Act defines a contract as "an agreement which is enforceable at law". Thus all agreements are not studied under the Indian Contract Act, since some of the agreement are not contact. Only those agreements which are enforceable at law create an obligation and in case of a breach of promise by one party to the agreement, the other party has a legal remedy. As such a contract comprises of two elements:

       (1) An agreement, and

       (2) Legal obligation i.e. should be enforceable at law

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       It means that there are some agreement which are not enforceable in law courts. Such agreement do not give rise to contractual obligation and are not contracts.

Difference between Agreement and Contract:

      

       All Contracts are Agreement.

 Thus it is quite clear from the above distinction that a contract requires an agreement and its enforceability. In other words, the validity of an agreement depends upon

the presence of certain essential in the contracts as laid down by the act as well as some judicial decisions. The following are the essential of a valid contract :

      (1) There must be two or more parties.

      (2) There must be an agreement between two or more parties i.e. offer and acceptance of an offer.

      (3) The parties to an agreement must be competent to contract.

      (4) The agreement must be made with the intention to create legal obligation.

      (5) The agreement must be made with free consent.

      (6) The agreement must be for a lawful consideration and lawful object.

      (7) The agreement must not be expressly declared void under the Act.

      (8) All legal formalities must be complied with, which are required by the governing law.

 All Agreements are not Contract.

As we have seen above that an agreement is a wider term than a contract. The term 'agreement' includes personal, social, domestic, lawful, unlawful, void, and voidable

types of promises. Those agreements which are not enforceable by law are not legal entity are narrated below:

     (1) Some domestic and family agreements: When the members of a family express intention to bind themselves are contract. But when there is no intention of the members to bind themselves, 

does not constitute a contract since they do not express intend to create legal relations.

  Example : 'A' gives a promise to his son to give him a pocket allowance of rupee one thousand every month. In case 'A' fails to give his son the promised amount, the son has no remedy 

against 'A'.

     (2) Certain social or friendly agreements : Such agreements have no legality and binding on the parties, as such these are not contracts.

  Example : 'A' invites 'B' for dinner in restaurant, and 'B' accepts the invitation. On the appointed day, 'B' goes to the restaurant but 'A' fails to reach there or 'A' refuses dinner to 'B'.

'B' has a no remedy against 'A'. Similarly if 'A' is present in the restaurant but 'B' does not reach there. 'A' has no remedy against 'B'.

    (3) Political promises or agreement : When political leaders make some promises to be performed during election campaign or at any time, those promise do not possess any legal obligation 

since they were made without intention to bind themselves.

    (4) Agreement without all essential of valid contract : Any agreement not possessing all the essential of a valid contract laid down by the act, are not contract and remain only agreement.

    (5) Agreement expressly declared void by the law : All such agreement which are expressly declared as void by the law cannot be contract. For example an agreement in restraint of marriage

or trade or legal proceedings, wagering agreement, without adequate consideration and lawful object etc. are agreement expressly declared as void by the law. Such agreements are not enforceable

by law and as such, cannot be contract.

   (6) An agreement to make a contract : An agreement to enter contract in future is not a binding contract and is not enforceable by law as has been declared in Jyoti. v. Shree Durga Mining Co. 's

case.

   (7) Commercial transaction without legal binding : Usually, commercial transaction are entered to bind the parties legally. But where it is expressly negatived in the agreement, then such

 agreement cannot create contractual legal relation and so does not create a contract.

 As such it is clear from the aforesaid description that all contracts are agreements but all agreements are not contracts.