Lecture 02

Definition of Agreement:
Agreement is a negotiated and usually legally enforceable understanding between two or more legally competent parties. When a person (promised) offers something to someone else (promisee), and the concerned person accepts the proposal with equivalent consideration, this commitment is known as the agreement. When two or more than two persons agree upon the same thing in the same sense (i.e. Consensus ad idem), this identity of minds is agreement. The following are the types of agreement are as under:
• Wagering Agreement: Wagering Contract is one in which there are two necessary parties between which the contract has been made and wherein, the first party promises to pay a certain sum of money to the second party on the happening of a particular event in the future and the second party agrees to pay to the first party on not happening of that particular event. The basic fundamental of a wagering agreement is the presence of two parties who are of sound mind to get profit or loss. A Wager in the common language means Betting or Gambling.
• Void Agreement: Void agreements are those agreements which are not enforced by law courts. It is quite clear that non-fulfillment of any of these conditions by one of the parties to a contract shall make an agreement void. These conditions being:-
1. Free consent of the parties;
2. Competency of the parties to contract;
3. Existence of a lawful consideration;
4. Existence of a lawful object;


• Voidable Agreement: A voidable contract is a formal agreement between at least two parties that may not be legally enforceable.
A contract can be deemed voidable if:
• One or both parties have not disclosed a material fact.
• The contract includes misrepresentation, errors, or fraudulent statements.
• The contract was signed under duress or undue influence.
• One or both parties could not legally enter into a contract.
• The contract contains one or more unconscionable terms.
• Breach of contract occurs.
Voidable vs. Void Contracts
It's important to understand the difference between contracts that are voidable and those that are void. While a voidable contract can still be enforced if both parties agree to the terms despite flaws in the agreement, a void contract is never legally enforceable. Contracts that are void include those that require either or both parties to commit illegal activity to fulfill their terms. Previously valid contracts become void after one party has died or becomes otherwise unable to fulfill the contract terms. A change in applicable laws or public policy can also void a contract.
Parties to a void contract cannot sue the other party for not fulfilling the contract and must restore any benefit they received to the original party. With voidable contracts, the party negatively affected by the issue can sue for damages.
Examples of Voidable Contracts
Minors who have signed a contract can walk away at any time because they did not have the legal ability to enter this agreement. If one party was tricked or forced into signing, the contract is voidable. It is also voidable if one or more parties was under the influence of drugs or alcohol when signing.

Examples of Void Contracts
Void contracts may:
• Pertain to illegal activity such as prostitution, gambling, or another crime
• Be signed by a minor or another person deemed mentally incompetent to enter a contract
• Depend on the occurrence of an impossible event or feat
• Go against public policy
• Restrain someone from performing certain legal activities such as working or choosing a spouse


• Implied Agreement:
An implied agreement is an obligation between two or more parties in the absence of a written contract. An implied agreement is an obligation between two or more parties in the absence of a written contract, based on the interest of fairness implied by circumstance or conduct.


• Express Agreement:
An express contract is a legally binding agreement, the terms of which are all clearly stated either orally or in writing.


• Conditional Agreement:
Conditional contract is an agreement that is enforceable only if another agreement is performed or if another specific condition is satisfied. A conditional contract is also termed as hypothetical contract.


• Illegal Agreement:
An illegal agreement under the common law of contract, is one that the court will not enforce because the purpose of the agreement is to achieve an illegal end.

Differences between Contract and Agreement:
Agreement Basis of Comparison Contract
• Promises and commitments forming consideration for the parties to the same consent are known as an agreement. Definition • The agreement, which is legally enforceable, is known as a contract.
• The agreement is defined in section 2 (e) Defined in • Section 2 (h)
• Offer and Acceptance Elements • Agreement and Enforceability
• Not necessarily In Writing • Normally written and registered
• Does not creates legal obligation Legal obligation • Creates legal obligation
• Every agreement need not be a contract. One in other • All contracts are agreement
• Wide Scope • Narrow