Contract Act

Difference between agreement and contract

What is the Difference between agreement and contract

A contract is an agreement enforceable by law whereas every promise and every set of promise
forming the consideration for each other is an agreement. 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.

  • The elements of an agreement are offer and acceptance whereas the elements of a

contract are agreement and its enforceability.

  • An agreement may or may not create legal obligations but creation of a legal obligation is

a must in contracts.

  • An agreement may not be binding and hence, may not be enforceable whereas contracts are binding on both the parties and hence, enforceable.
  • An agreement may not result in a contract but a contract should constitute an agreement.
  • The contract is discussed under section 2(h) of Indian Contract Act, 1872 which says a contract is an agreement enforceable by law. whereas The agreement is discussed under section 2e. The agreement is not enforceable by law and order.
  • Every contract is legally enforceable but every agreements are not legal.
  • Scope of the contracts are quite limited because it considers only commercial agreements whereas the scope of the agreements are quite wider because it consists of both the commercial as well as the social agreement.

Although the above mentioned differences exist between agreements and contracts, the term is generally interchangeably used.



    • 2 years ago (Edit)

    […] VII (sections 76 to 123) of the Indian Contract Act, 1872 (the “Indian Contract Act” or “Indian Contract Act&#822… controlled the sale of goods in India until the first of July, 1930. Being founded on the […]

    • 2 years ago (Edit)

    […] Also Read: Difference between agreement and contract […]

    • 2 years ago (Edit)

    […] Also Read: Difference between agreement and contract […]

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