An agreement in order to constitute a contract must possess the following elements:
1) Parties to the contract must be competent
2) Parties to the contract must exercise free consent
3) Agreement must be for lawful considerations with a lawful object.
4) Agreement must not be expressly declared to be void.
The above elements must exist together. An agreement with all the above elements is a valid contract and therefore enforceable.
All agreements are not contracts but all contracts are agreements. In other words, a contract must have all the above elements. When any element is missing, it ceases to be a contract though it may be a valid agreement. An agreement is a wider term than a contract. All contracts are, therefore agreements but all agreements are not contracts.
Agreements and Contracts distinguished
1) Offer and acceptance together constitute an agreement
2) Every promise and every set of promises forming consideration for each other is an agreement.
3) Agreement may not create any legal obligation. All agreements are not contracts.
4) An agreement is a wider concept or a genius.
5) Agreement is not a concluded or a binding contract.
1) Agreement and enforceability together constitutes a contract
2) A contract is an agreement enforceable by law.
3) A contract necessarily creates a legal obligation. All contracts are agreements.
4) Contract is a specie of an agreement
5) Contract is concluding and binding.