If X fails to serve dinner to Y, Y cannot go to the courts of law for enforcing the agreement.Ĭonsideration is “something in return.” Consideration has been defined as the price paid by one party for the promise of the other. Agreements of a social or domestic nature do not create legal relations and as such cannot give rise to a contractĮxample, X invited Y to a dinner Y accepted the invitation. The parties to an agreement must create legal relationship.
There must an offer and acceptance of the same. It is one of the essentials of valid contract. “All contracts are agreements, but all agreements are not necessarily contract” Unless there is consensus ad idem, there can be no contract.Īn agreement, to become a contract, must give rise to a legal obligation or duty.Īn agreement may be social agreement or legal agreement.īut only those agreements which are enforceable in a court of law are contracts. The parties to the agreement must have agreed about the subject matter of the agreement in the same sense and at the same time.
Promise= a proposal when accepted becomes a promise. Sec 2(h) defines contract “as an agreement enforceable by law”.Ĭontract=Agreement + Enforceability at law.Īgreement is defined as “every promise and every set of promises, forming consideration for each other”. A contract is an agreement made between two or more parties which the law will enforce.
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