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What is the difference between contract and agreement?
61 Lectures 1 hours
43 Lectures 33.5 hours
Before going for differences, first let us understand the difference between contract and agreement and their types
Agreement is commitment made or proposal made by a person or a promisor to offer something to another person or a promisee and that promisee accepts that proposal with same considerations. Then it is called as agreement.
Types − some of types of agreements are
- Void agreement
- Illegal agreement
- Implied agreement
- Express agreement etc.
If an agreement is legally enforceable for doing or for not doing then it is called as contract. Contract must contains offer, acceptance, unconditional considerations and adequate. These are also called as elements of contract.
Types − some of types of contracts are
- Void contract
- Express contract
- Bilateral contract
- Unilateral contract
- Contingent contract etc.
The major differences between a contract and an agreement are as follows −
|It is termed as a formal arrangement between two or more parties, which is enforced by law.||It is termed as a formal arrangement between two or more parties, which is not enforced by law.|
|Agreement and enforceability are the elements of contract.||Offer and acceptance are the elements of agreement.|
|It is stated in section 2 (h) of Indian Contract Act, 1872.||It is stated in section 2 (e) of Indian Contract Act, 1872.|
|It is written and registered.||It is not necessarily in a written format.|
|It has legal obligations.||It doesn’t have any legal obligations.|
|All the contracts are agreements.||Not all agreements are contracts.|
|It has narrow scope.||It has wide scope.|
|Consideration is required.||Consideration is not required.|
An old saying “All contracts are an agreement, but all agreements are not contracts”. In simple words contracts are legally bind agreements and rest which are not legally bind are called agreements
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