Introduction:
Many students get confused between agreement and contract. In CA Foundation law,
this is one of the most important topics. In this post, we will understand the difference in simple words with examples.
What is Agreement?
An agreement is a promise between two or more parties.
Agreement is not only legal it may be illegal
An agreement enforceable by will known as contract
Agreement is a wider term. But contract is narrow term.
👉 Example:
A promises to give a gift to B. This is an agreement.
because it is not registered by law and does not have any legal existence.
What is Contract?
A contract is an agreement that is legally enforceable.
👉 Example:
A agrees to sell a book to B for ₹500. This is a contract.