All contracts are agreements but all agreements are not contracts.

 All contracts are agreements but all agreements are not contracts.

A contract plays a very important role in modern world, especially in Business World. In order to become a full fledged contract it needs to pass through several stages. The journey of a contract starts from an offer; an offer when gets accepted becomes promise, promise needs to back by consideration in order to become an agreement, now at last if an agreement is enforceable by law then it becomes Contract. From this one can have a fair idea why every contract is an agreement. Similarly, if an agreement is not enforceable by law then it won’t become contract. Hence all agreements are not contract.

Section 2(h) of the Indian Contract Act, 1872 says, “An agreement enforceable by law is a contract.” Briefly, Contract is a pack of promises which give rise to several obligations and those obligations are recognized by the law. All contracts are agreements but all agreements are not contracts. It means a legal remedy is available in case of non performance. It is to be noted that all agreements cannot become contract i.e. only agreements which satisfy all the essentials mentioned in Section 10 of Indian Contract act, 1872 becomes contract. These essentials are discussed in later part of this article.

Section 2(e) of the Indian Contract Act, 1872 says, “Every promise and every set of promises forming the consideration for each other is an agreement.” Here, promise flows from the sides. Promise has been defined in Section 2(b) of the Indian Contract Act, “When the person to whom proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal when accepted becomes promise.”
In simple words, when a proposal is accepted it becomes promise and promise from the two parties to one another is known as an agreement.

Section 23 of Indian Contract Act, 1872 says that every agreement which has unlawful consideration or Object is void. All contracts are agreements but all agreements are not contracts. This section also provides with circumstances when object or consideration of an agreement is not unlawful. According to this section, Object and Consideration should not be forbidden by law; or is of such nature that it would defeat the provisions of law; or is fraudulent; or involves or implies injury to the person or property of another; or the court regards it as immoral, or opposed to public policy.

In law, a contract is a legally binding agreement between two or more parties which, if it contains the elements of a valid legal agreement, is enforceable by law [3]or by binding arbitration. A legally enforceable All contracts are agreements but all agreements are not contracts. contract is an exchange of promises with specific legal remedies for breach. These can include compensatory remedy, whereby the defaulting party is required to pay monies that would otherwise have been exchanged were the contract honored, or an Equitable remedy such as Specific Performance, in which the person who entered into the contract is required to carry out the specific action they have reneged upon.

As long as the good or service provided is legal, any oral agreement between two parties can constitute a binding legal contract. All contracts are agreements but all agreements are not contracts. The practical limitation to this, All contracts are agreements but all agreements are not contracts. however, is that generally only parties to a written agreement have material evidence (the written contract itself) to prove the actual terms uttered at the time the agreement was struck. In daily life, most contracts can be and are made orally, such as purchasing a book or a sandwich. Sometimes written contracts are required by either the parties, or by statutory law within various jurisdictions for certain types of agreement, for example when buying a house[6] or land.

This article mainly concerns contract law in common law jurisdictions (approximately coincident with the English-speaking world and anywhere the British Empire once held sway). Common-law jurisdictions usually offer proceedings in the All contracts are agreements but all agreements are not contracts. English language, which has become to an extent a lingua franca of international business.[8] The common law retains a high degree of freedom of contract, with parties largely free to set their own terms, whereas civil-law systems typically apply certain over-arching principles to disputes arising out of contract (see, for example the French Civil Code). It is very common for businesses not located in common-law jurisdictions to opt in to the common law through a Choice of law clause.

For a Contract to be there an agreement is essential; without an agreement, there can be no contract. As the saying goes, “where there is smoke, there is fire; for without fire, there can be no smoke”. It could will be said, “where there is contract, All contracts are agreements but all agreements are not contracts. there is agreement without an agreement there can be no contract”. Just as a fire gives birth to smoke, in the same way, an agreement gives birth to a contract.

As stated above, an agreement to become a contract must give rise to a legal obligation. If an agreement is incapable of creating a duty enforceable by law. It is not a contract. Thus an agreement is a wider term than a contract.

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