" All contracts are agreement but all agreements are not contract." - Commercial Law

“All contracts are agreement but all agreements are not contract.” Comment.  

           True, all contracts are agreements; but all agreements are not contracts. When an offer is accepted, it becomes a contract. A contract, on the other hand, is a legally enforceable agreement that exists to undertake specified acts. Without an agreement, there is no contract.

Meaning of contract - A contract is a legally binding arrangement. It signifies that a contract is an agreement between two or more people who are bound by legal responsibilities and have fulfilled all of the requirements for a valid contract.  

Thus, Contract=Agreement+ Enforceable at law.

Meaning of Agreement - When two or more parties accept an offer, it is referred to as an agreement.

Thus, Agreement=Offer + Acceptance

Essential Elements of a Valid Contract- 

Essential components of the contract or agreement must be included in order to preserve the usual phase of tasks for both parties. The following are the necessary components of a legally binding contract. 

 1. Offer and Acceptance - A 'lawful offer' by one party and a 'lawful acceptance' of the same by the other is required to form a valid contract. Any contract must begin with an offer from one side that must be accepted by the other.  

            For example- A makes an offer to buy B's car for Rs. 2 lacs, which B accepts. This has now turned into a promise.

2. Intention to Create Legal relationship - If the parties do not desire to have a legal connection, a contract is not required, and hence it is not regarded a contract.  

           For example, a husband pledged to pay Rs. 15000 to his wife for her medications. However, he failed to pay, and the wife is unable to intervene because there is no intention of forming a legal connection.

3. Lawful Consideration- The offering party pays the offered party something called consideration. It could be in the form of time, money, information, or services. A matter cannot be fought in court without a legal consideration.  

             For example- I offer to give J Rs. 5000 in exchange for you cutting my grass.

4. Capacity of parties- The parties to a contract must be legally capable of entering into a contract. The contract is void if one of the parties lacks the legal capacity to contract. The following individuals are deemed incompetent to contract. 

•  Minors  
•  Mentally ill people 
•  Individuals who have been disqualified by a legislation to which they are subject.  

            For example- A committed to sell his bike to B, but because he is under the age of 18, he is unable to enter into a contract.

5. Free Consent- Another requirement of a valid contract is the parties' permission, which should be unrestricted. Two or more parties are considered to consent under the contract Act when they agree on the same things in the same sense. When none of the following factors are present, the consent is considered free:  

•  Coercion   
•  Misrepresentation  
•  Deception   
•  Undue Influence   
•  Error

6. Lawful Object- Only for a lawful consideration and for a lawful goal can an agreement become a genuine contract. According to the Contract Act, the following considerations and objects are illegal.  

• If the law forbids it. 
• If it violates any other law's provisions. 
• If the information is false. 
• If it causes harm to someone's person or property. 
• If it is deemed immoral or contrary to public policy by the courts. If an agreement is illegal, immoral, or contrary to public policy, it becomes a void contract.

          For example- A decides to smuggle things out of the nation by selling them to B. As a result, this transaction is null and invalid.

7. Certainty of meaning- The agreement should be specific instead of unclear or confusing. It's important to figure out what agreement means. It cannot be enforced otherwise.  

          For example- I agreed to pay Mr. X a fair price for his property. Under this instance, the desired quantity isn't guaranteed in the contract. It is void, as it is.

8. Possibility of performance- A legally binding contract must be capable of being fulfilled. The agreement is not valid if the act is physically, practically, or legally impossible.  

          For example- A agrees to bring back the life of B's deceased relative. This isn't true because it's impossible to bring someone back from the dead.

9. Not Declared to be Void - An agreement to become a contract should not be one that has been specifically declared void by any law in the country, as it will be unenforceable in court. According to sections 24 to 30 of the Contract Act 1872, several agreements have been declared expressly void.  

             For example- Sections 24 to 30 deal with agreements with no consideration, wagers, and promises to perform impossible deeds, among other things.

10. Legal Formalities - The agreement can be oral or written, but if it is written, it must follow all legal requirements such as attestation and registration. The agreement cannot be enforced by law if it does not follow the required legal formalities.  

 Conclusion -  These are the necessary elements of a legal contract, as defined by the Indian Contract Act.