An agreement which creats legal obligation is a contract.The oblilgation is an undertaking to do or abstain from doing doing some definite act or acts. Section 2(h) of the Indian contract define”An agreement enforceable by law is a contract.” Thus a contract consists of the two elements:1.an agreement 2.the agreement must be enforceable by law. The term agreement is defined in section 2(e) of the Indian Contract Act “Every promise and every set of promise, forming consideration for each other,us an agreement“.
However, there are some agreements which are not enforceable in a law court. Such agreements do not give rise to contractual obligations and are not contracts. An agreement of purely social or domestic nature is not a contract.
Valied Contract:
According to section 10 of the Act lay down the essentials of a valild contract. According to the section,”All agreemenrts are contracts if they are made by the free consent of the partiescompetent to contract,for a lawful consideration and with a lawful object,and are not hereby expressly declered to be void”. Contracts are agreements, but all agreements need not be contracts. The term agreement is thus much wider than the term contract.
An agreement becomes enforceable by law when it fulfils certain conditions. These conditions, which may be called the essential elements of a contract,are:
1. Offer and Acceptance
2. Intention to create legal relations.
3. Lawful Consideration
4. Capacity of parties
5. Free and genuine consent
6. Lawful object
7. Agreement not declared void
8. Certainty and possibility of performance
9. Legal formalities.
The Legal Contract is invalid, if the above conditions are not fulfilled.
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