All Agreements are not Contract but all Contracts are Agreements.


Section 2(h) of the Indian Contract Act defines the term contract as “any agreement enforceable by law”

Section 2(e) defines agreement as “every promise and every set of promises, forming the consideration for each other.”

Mathematical equation




Offer and Acceptance: For any contract there must be at least two parties, one of them making      the offer and the other one accepting it. The acceptance must be unconditional and absolute.

Lawful consideration: An agreement to form a valid contract should be supported by consideration. Consideration means “something in return”, it may be in cash or kind.

Competent to contract or capacity: In order to make a valid contract the parties to it must be competent to be contracted. A person is considered to be competent to contract if:

The person has reached the age of maturity.

The person is of sound mind.

The person is not disqualified from contracting by any law.

Free Consent: To constitute a valid contract there must be free and genuine consent of the parties to the contract. It should not be obtained by misrepresentation, fraud, coercion, undue influence or mistake. Example if A tells B to give him 2,00,000 to A or else he will kill his son and B agrees to pay him the money than such a contract is not valid as it was not obtained by the free consent of the party

Lawful Object: The objective to make the contract must not be illegal or unlawful I.e. neither fraudulent or forbidden by law, nor opposed to any public policy.

Agreement not declared void: Agreements which have been expressly declared void or illegal by law are not enforceable at law; e.g. agreement with minor is void.

Certainty of Meaning: the terms of the agreement must be certain and unambiguous. According to Section 29 of the Indian Contract Act, 1872, “agreements the meaning of which is not certain or capable of being made certain are void.”

Intention to Create Legal Relationships: when the two parties enter into an agreement, there must be intention to create a legal relationship between them if there is no such intention on the part of the parties. There is no contract between them

Agreements of a social or domestic nature do not contemplate legal relationship; as such they are not contracts.

Possibility of Performance: the contract should be a possible thing to perform. Example- ‘A’ agrees with ‘B’ to discover treasure by magic and sharing of the treasure. This agreement cannot be enforced.

Legal Formalities: legal formalities such as written agreement, stamping, registration etc. wherever required should be fulfilled.


A contract is a legally binding agreement or relationship that exists between two or more parties to do or abstain from performing certain acts.

For a contract to be formed an offer made must backed by acceptance of which there must be consideration. Both parties involved must intend to create legal relation on a lawful matter which must be entered into freely and should be possible to perform.

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.

Therefore all agreements are not contract but all contracts are agreements.




3 responses to “All Agreements are not Contract but all Contracts are Agreements.”

  1. maryam mmadi Avatar
    maryam mmadi

    very Nice answer cos now i understanding well that topic . só Nice one

    1. ashis sarkar Avatar
      ashis sarkar

      Very nice ansr….

  2. Dennis Akpo Avatar
    Dennis Akpo

    I really like the answer but is brief…..explain further.

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