DIFFERENCE BETWEEN AGREEMENTS AND CONTRACTS
AGREEMENT
When a person offers something to someone else, and the concerned person accept the proposal with equivalent consideration, this is known as agreement. When two or more person agreed upon same thing in the same way. In short it is defined as the contract which lack enforceability by law is known as agreement.
Types of agreement are as under:
- Void Agreement
- Wagering Agreements
- Contingent Agreement
- Voidable Agreement
- Illegal agreement
- Implied Agreement
- Express Agreement
Example: Harsh and Harshita decided to go for shopping on Saturday. Harsh did not come for shopping, and this resulted in the waste of Harshita’s time. Now Harshita can’t compel Harsh for the damages as the decision to go for shopping is not a contract but a mutual agreement.
CONTRACT
A legally enforceable agreement for doing or not doing an act is known as contract. A contract must contain offer and acceptance, intention of creating legal obligation, adequate and unconditional consideration.
Types of contracts are as under:
- Void Contract
- Voidable Contract
- Contingent Contract
- Express Contract
- Implied Contract
- Bilateral Contract
- Unilateral Contract
- Executory Contract
- Executed Contract
Example: Siddharth promises his friend to pay his debt, and the agreement was in writing as well as registered. This is a valid agreement and can be enforceable.
DIFFERENCE BETWEEN CONTRACTS AND AGREEMENTS
Basis for Comparison | Contracts | Verbal Agreements |
Meaning | When an agreement is enforceable by law, it becomes a contract | When a proposal is accepted by a person to whom it is made, with requisite consideration |
Section | Section 2 (h) of Indian Contract Act, 1872 | Section 2(e) Indian Contract Act, 1872 |
Elements | Agreement and enforceability | Offer and acceptance |
Scope | Narrow | Wide |
Consideration | There must be a consideration | Agreement can be made without any consideration |
Preferred mode | Contract must be in writing | Agreements may be made in orally or in writing |
Legality | There is a legal obligation in every contract | Legal obligation may or may not be included in verbal agreement |
One in other | All contracts are agreements | But all agreements need not to be a contract |
Clarity & Details | Can provide specific and detailed terms and conditions | Relies on memory and subjective interpretation |
Modification | Amendments or modifications may require written consent | Can be modified verbally, but proving the modification may be difficult |
Legal Protection | Offer greater legal protection and clarity in case of disputes or breaches | Lack of written evidence may make it challenging to resolve disputes or prove the terms |
Complexity | Suited for complex agreement that require detailed provision | Suitable for simpler or informal agreements |
Professionalism | Indicate a high level of professionalism | Less formal and may indicate a more casual approach |
Also Check : Franchise Agreements
Jibran Farooqui is a seasoned professional with a passion for driving business growth and expansion. As a Business Expansion Expert at Juris Consultants, he brings a wealth of experience and a strategic mindset to help businesses navigate the complexities of growth in an ever-evolving market. With a background in business development and a deep understanding of the legal and regulatory landscape, Jibran is well-equipped to guide clients through the intricacies of expanding their operations. He specializes in developing market entry strategies, forging international partnerships, and optimizing business processes to maximize profitability.
