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Assignment Business Law: Sheza Asif BBA192013

All contracts require an agreement but not all agreements constitute a legally binding contract. To be a contract, an agreement must meet two conditions: there must be an offer and acceptance, and the agreement must be enforceable by law. Social or informal agreements, like inviting someone to dinner, only involve an agreement between parties but do not create any legal obligations if one party fails to fulfill their end. A contract like the sale of a car involves a legally binding agreement where the parties have legal recourse if the terms are not met. So in summary, the key difference is that contracts contain agreements that are enforceable in a court of law, while simple agreements only involve the consent and promises of parties without legal force

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118 views4 pages

Assignment Business Law: Sheza Asif BBA192013

All contracts require an agreement but not all agreements constitute a legally binding contract. To be a contract, an agreement must meet two conditions: there must be an offer and acceptance, and the agreement must be enforceable by law. Social or informal agreements, like inviting someone to dinner, only involve an agreement between parties but do not create any legal obligations if one party fails to fulfill their end. A contract like the sale of a car involves a legally binding agreement where the parties have legal recourse if the terms are not met. So in summary, the key difference is that contracts contain agreements that are enforceable in a court of law, while simple agreements only involve the consent and promises of parties without legal force

Uploaded by

Asif ghazi
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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ASSIGNMENT BUSINESS LAW

Sheza Asif
BBA192013
ASSIGNMENT BUSINESS LAW

All contracts are agreement but all agreements are not contract, Justify this
statement with valid reasons and examples

The above statement is correct according to the contract act of 1872. As per contract
act there are two element which are necessary to make a contract & these are

a. An Agreement
b. An agreement which is to be enforced by Law.

Definition of Contract

According to Section 2 clause (h) of the Contract Act, which states that without
agreement there will be no contract, it is the agreement which takes the shape of
contract.

With the help of this definition, we can know that all contracts are agreements.

As per Section 2 (e) each promise and combination of promises creating the reflection
for each other is called as agreement.

This definition gives two points.      

1. "Every promise" is an "agreement.


2. And "every set" of "promises" is also an agreement

Elements of Agreement

There are four elements necessary for forming an agreement:


a. Promise: When a proposal offered by a party, once accepted by one more
party then converts into a promise.
b. Presence of Parties: There is always required two or more parties to form an
agreement. It is quite clear that agreement can’t not be by one individual or party
it has to be two individuals or parties.
c. Consensus Parties: Free consensus of parties is needed for founding a valid
agreement.
d. Consideration: The consideration is another important element of contract.
Elements of Contract

Following are the basic elements of contract:


a. Acceptance: It denotes that offer is accepted along with the terms by party to
which it was offered.
b. Consideration: The Consideration is required be made by the both parties by
accepting the offer.
c. Offer: It is considered as proposal which is made by a party to other party in
which expresses readiness of party to be agreed on terms.
d. Certainty: The terns & conditions with regards to contract must be clear to
parties & they should accept it as well.
e. Intention: There should be proper intent of both parties as both will be accepting
it.

EXAMPLES OF AGREEMENT

Example 1: Laiba’s friend gave her a proposal to go with her on a vacation and Laiba
accepted it. So as per this example Laiba has no legal compulsion so we can say that it
is a social agreement not contract.

Example 2: Laiba invites Maleeha to dinner. Maleeha accepts this invitation but she
does not join the dinner. So, in this case Laiba cannot sue Maleeha for her
expenditures. As this was just a social agreement & it cannot make legal obligation.

EXAMPLE OF CONTRACT

Ali has agreed to sell his car to Nabeel at the amount of 1.2 million. In this situation Ali
will be liable as per law to sell car to Nabeel if he pays the requisite amount. To
complete the deal in this situation there is legal obligation which is called legal
agreement & it is a contract as well.

In this way we can say that agreement is very much essential to make a contract but
every agreement is not a contract. There has to be a legal application or compulsion to
convert agreement into a contact.

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