DIFFERENCE BETWEEN CONTRACT AND AGREEMENT
| Aspect | Contract | Agreement |
|---|---|---|
| Definition | A legally binding agreement enforceable by law. | A mutual understanding or arrangement between two or more parties. |
| Essential Elements | Offer, acceptance, consideration, intention to create legal relations, and capacity of the parties. | Offer and acceptance. |
| Consideration | There must be consideration while forming the contract. | Agreements can be formed without consideration. |
| Defined under | Section 2 (h) of the Indian Contract Act, 1872. | Section 2 (e) of the Indian Contract Act, 1872. |
| Enforceability |
Legally enforceable by the parties involved. | May or may not be legally enforceable. |
| Legal Obligations |
Creates legal obligations between the parties. | May or may not create legal obligations, depending on the intention. |
| Nature of Parties |
Parties can be individuals, companies, or entities. | Parties can be individuals, companies or entities. |
| Legal Consequences | Breach of contract may lead to legal remedies or damages. | Breach of agreement may not have the same legal consequences as a contract |
| Written/Formal Requirement | Some contracts must be in writing and comply with specific formalities. | Agreements can be oral or written, and formalities may not be necessary. |
Registration | Some contracts require registration, e.g., sale of immovable property | Agreements generally do not requure registration. |
| Mutual Consent |
Requires mutual consent of the parties involved. | Requires mutual consent of the parties involved. |
| Intention to be Legal | Must have an intention to create legal relations. | May or may not have an intention to create legal relations. |