Are All Agreements Contracts In Terms Of The Contract Act?

Table of Contents

Introduction

The question ” Are all agreements Contracts in terms of the Contract Act? sometimes create confusion in our minds. Most of the time, people have the wrong concept regarding agreements and contracts but there is a difference between contract and agreement. They have a problem differentiating them. As a result of that, there must face a lot of problems are unnecessary. To avoid the hassle in your legal practice, you need to check all details of conditions when all agreements are contracts.

Contract

In this regard, before you come to know about an agreement, you should know the definition of a contract. Under section 2(h) of the Indian Contract Act 1872, the contract is :

‘An agreement enforced by the law is a contract.’

According to Sir Fredrick Pollock, the Contract goes as follows:

“Contract becomes very active from each & every agreement and promise can also cover under the law that can be enforceable.”

According to Anson, the contract comes with the following words.

‘A contract goes with an actionable promise or promises. Such type of promise involves two parties, such as a promisor and a promisee, with an expression of the common intention as well as expectation according to the act or forbearance promised.

According to Salmond, ‘Contract becomes an agreement making and defining obligation between parties.

For example, When A promises to sell a Television to C @ Rs. 6,000, then it is called an agreement, and C promises to buy the Television at the same price. Here it goes as an ‘Enforceability of the agreement.

According to the law of agreement under section 2(e) of the Act: Each word under promise goes under consideration from each to another, and the complete matter becomes an agreement. After checking the definition of the agreement, it can be surely told that promise is an agreement.”

Different types of contracts can be executed between the contracting parties as per their understanding or business requirements.

Promise

Under section 2(b), according to the Indian Contract Act, 1872, the term promise comes as follows.” If a person goes with consideration for a proposal, then it denotes his assent, and simply the proposal goes for acceptance. That means when a proposal is accepted, it turns into a promise. To check whether all agreements are contracts or not, go through the below.

Surely, an agreement goes for a bilateral transaction among the persons, and it involves a proposal or even an offer by one person, and there must be an acceptance of such proposal by another one. On the other way, it requires a ‘plurality of persons’ as a single does not agree with himself.

According to the details mentioned above, an agreement turns itself into a contract if it comes to be raised for the lawful obligation. The thing is that if an agreement does not go under the law enforceable, it will not go for a contract.

Agreement under Enforceability

Under Section 10, the Act comes to deal with the conditions of enforceability of an agreement. According to it, “All agreements come as contracts when they are under the free consent of the parties that tells the competence to the contract. For a lawful consideration and object, these are not declared to be void.

Nothing in the container will affect any law in force for India and even not expressly repealed and by which the contract should come in writing or the presence of witnesses or, moreover, any law regarding the registration of documents. The Agreement without consideration is void in the eye of the law.

In this way, under section 10 of the Act, the following conditions should also be essential for a contract valid: –

Competent Parties

According to a sections 11 and 12 of the Act, the following person should not go as competent to the contract, which means ‘all agreements are contracted’ is not possible.

(i) In the case of Minors (Mohori bibee v. Dharmodas Ghose) – It happened that an agreement with the minor was void)

(ii) Persons have a sound mind

(iii) Persons disqualified from contracting by the law to which they are subject.

They must agree to something

They must come to agree on something in the same sense, and the consent of the party must not be obtained by

Coercion (S. 15 of the Contract Act ) – An act is forbidden by the Penal Code.

(In Chikam Amiraju V. Chickam Seshamma) It came to be held that the threat of suicide goes to coercion within section 15 of the Contract Act).

Undue Influence (S.16 of the Contract Act ) – The influence in which a person is induced for an act otherwise than by their own will or without the necessary attention to the consequences.

Fraud – (S.17 of the Contract Act)- Fraud comes to be defined under section 17 of the Indian Contract Act, 1872.

Misrepresentation – (S.18 of the Contract Act) – Negligent, Fraudulent, or innocent misstatement, even an incomplete statement of a material.

Mistake – Here, both the parties to an agreement are under a mistake as there must be an essential to the void agreement.

Consideration and lawful object

For the formation of a contract where the fact does not go for “all agreements are contracted”, it is important that the consideration and the object under a contract must go for lawful. Consideration, as well as object, is said to be unlawful if-

It is completely forbidden by law

It would come to defeat the provision of any law,

It is fraudulent

It implies or involves an injury to the person or property of another.

The court comes as immoral or against public policy.

The agreement that must come to be made for some consideration (S.25 of the Contract Act)

Section 25 of the act declares that an agreement without consideration becomes void. However, there are certain conditions enumerated in section 25 under which a contract without consideration becomes a valid one.

The agreement must not be declared void

Under the Indian Contract Act, the following agreements come to be declared void –

Where the parties both to an agreement are under a mistake of the fact that is essential to the agreement. (Section 20)

An agreement comes without consideration ( Section 25)

Agreement in restraint for the marriage of any person without minority. ( Section 26)

The agreement goes in restraint for trade (Section 27)

An agreement becomes an absolute restraint of judicial proceedings ( Section 28)

The meaning of an agreement is uncertain and incapable ( Section 29)

Agreement by way of the wager ( Section 30)

Agreement contingent for impossible matter ( Section – 36)

An agreement becomes to do an act that is not possible or which is subsequently impossible in itself without any default of a party. ( U/S 56)

Other legal requirements

An agreement will fulfil all the requirements of formalities necessitated by the particular law. The agreement must come in writing, be attested, and be registered if so required by the law under force in India. Certain agreements, such as :

An agreement to pay for a time-barred debt;

The agreement for transfer in case of an immovable party.

An agreement refers to the matter of arbitration in case of a dispute.

Such agreements must be reduced for writing and registration.

Conclusion

A contract becomes a legally binding agreement that exists between two or more parties just to do something or not. An agreement that stays between two or more parties to do or not to do something. An agreement begins with an offer and ends with consideration, but a contract goes for achieving another target with enforceability. For this breach of contract, a legal remedy comes to the aggrieved party against a guilty party. That means we can say that all the contracts undoubtedly are in agreement, but it is not that ‘all agreements are contracted’.