LL.B(Hons.) and BJS Preparation Series-Question: What is an Agreement? Are All Agreements Contracts?

 

Question: What is an Agreement? Are All Agreements Contracts?

Answer:

Definition of Agreement

An Agreement is a mutual understanding between two or more parties about their respective rights and duties regarding a particular matter. It is the meeting of minds (consensus ad idem) wherein one party makes a proposal (offer), and the other accepts it.

• Section 2(e) of the Contract Act, 1872 defines an agreement as:
  “Every promise and every set of promises, forming the consideration for each other, is an agreement.”

Key Elements of an Agreement

• Offer/Proposal: One party makes a proposal to do or not do something.
• Acceptance: The other party accepts the proposal.
• Consideration: Something of value must be exchanged between the parties.
• Intention: Both parties must intend to create legal relations.

Are All Agreements Contracts?

No, not all agreements are contracts. While every contract is an agreement, not every agreement qualifies as a contract.

• Section 2(h) of the Contract Act, 1872 defines a contract as:
  “An agreement enforceable by law is a contract.”

This means for an agreement to become a contract, it must fulfill certain legal enforceability criteria. If the agreement lacks enforceability by law, it is simply an agreement, not a contract.

Differences Between Agreement and Contract

Criteria	Agreement	Contract
Legal Enforceability	May or may not be legally enforceable	Always legally enforceable
Definition	Promise or set of promises (Section 2(e))	Enforceable agreement (Section 2(h))
Essential Elements	Offer, acceptance, consideration	Offer, acceptance, consideration, lawful object, lawful consideration, free consent
Binding Nature	Not always binding	Binding on parties

Important Notes

• An agreement becomes a contract only when the law recognizes it as enforceable.
• Agreements based on social or moral obligations generally are not enforceable.
• Agreements made without consideration or for unlawful purposes are void or voidable and hence not contracts.

Summary:

• An agreement is a promise or set of promises between parties.
• All contracts are agreements, but not all agreements are contracts.
• For an agreement to be a contract, it must be enforceable by law, satisfying conditions laid down in the Contract Act, 1872.

 Prepared by-

Nazmul Hasan

Senior Judicial Magistrate

Professional Highlights

• Senior Judicial Magistrate, 11^th  Bangladesh Judicial Service (BJS)
• Merit Position: 7^th  in the 11th BJS

Academic Qualifications

• LL.B. (Hons.) – First Class First, University of Rajshahi
• LL.M. – First Class, University of Rajshahi

Honors & Achievements                                                                                             

• Prime Minister Gold Medalist – 2017
• Agrani Bank Gold Medalist for Academic Excellence – 2023

Author’s E-book: A Guide to Excelling in the 18th BJS Exam

Nazmul Hasan is also the author of the e-book "Comprehensive Strategy for Excelling in the 18th Bangladesh Judicial Service Examination". This pioneering work is the first-ever e-book in Bangladesh dedicated to BJS exam preparation. The book has been widely praised and attracted a large number of candidates, providing them with effective strategies, valuable insights, and a structured approach to excel in the challenging BJS examination.