Define Agreement

Question: Define Agreement. [MPJS 1996]

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Answer

As the prominent jurist, Sir Joseph William Chitty says, an offer is “an expression of willingness to contract made with an intention (actual or apparent) that it is to become binding on the person making it as soon as it is accepted by the person to whom it is addressed”.

According to Section 2(e) of the Indian Contract Act: “Every promise and every set of promises, forming the consideration for each other, is an agreement;” and Section 2(b) says: “A proposal, when accepted, becomes a promise.” This is another way of saying that an agreement is an accepted proposal. The process of definitions comes down to this: A contract is an agreement; an agreement is a promise and a promise is an accepted proposal. Thus every agreement, in its ultimate analysis, is the result of a proposal from one side and its acceptance by the other.

Example: X promises to Y to sell his watch for Rs. 75,000/- and Y accepts to purchase it for the said amount. Both X and Y is said to have entered into an agreement.

As per Section 2(h), “An agreement enforceable by law is a contract”. An agreement is regarded as a contract when it is enforceable by law.

In other words, an agreement that the law will enforce is a contract. The conditions of enforceability are stated in Section 10. According to this section, an agreement is a contract when it is made for some consideration, between parties who are competent, with their free consent and for a lawful object, and where parties have the intention to create a legal relationship.

For example: X makes a request to Y that Y has to come for dinner to X’s house. Y promised, but he failed to come to X’s house for dinner. This is not an agreement because there is no consideration involved and there is no intention of parties to create a legal relationship.

Normally, an agreement is reached by the process of an offer by one party, termed the offeror, which is accepted by another, termed the offeree. Before the offeree can enforce the offerors promise, the offeree must give the consideration requested in the offer. If the consideration required from the offeree is a promise, the giving of that promise is said to result in a bilateral contract, under which both sides initially exchange promises. This is a contract having reciprocal promises.

However, if the requested consideration is an act other than a promise, its performance is said to make a unilateral contract, whereupon the offeror becomes bound by his offer. The promises of any contracting party may be express, or may be inferred by implication from their conduct. A contract is said to be executory so long as anything remains to be done under it by any party, and executed when it has been wholly performed by all parties. Similarly, the promise or consideration of any contracting party may be said to be executory or executed.

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Law of Contract Mains Questions Series: Important Questions for Judiciary, APO & University Exams

1. Law of Contract Mains Questions Series Part-I
2. Law of Contract Mains Questions Series Part-II
3. Law of Contract Mains Questions Series Part-III
4. Law of Contract Mains Questions Series Part-IV
5. Law of Contract Mains Questions Series Part-V
6. Law of Contract Mains Questions Series Part-VI
7. Law of Contract Mains Questions Series Part-VII
8. Law of Contract Mains Questions Series Part-VIII
9. Law of Contract Mains Questions Series Part-IX
10. Law of Contract Mains Questions Series Part-X