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Contract in nutshell

For a contract there must be an offer by one person and acceptance by the other person and having consideration between each other which forms agreement and if this agreement is enforceable by law it becomes contract. In day to day life, the terms agreement and contract are interchangeable. But, they have different implications under this Act.
  • In case of breach of an agreement the aggrieved party cannot file a case in court of law for the loss suffered
  • A contract is an agreement between two or more parties that is enforceable by law
  • In case of breach of an contract the aggrieved party can file a suit in court of law for the loss suffered

Note: All contracts are agreements but all agreements are not contracts.



Amar offers to sell certain goods to Akbar for  10,000. Akbar accepts the offer. Such an agreement is a contract and if, Amar refuses to sell then Akbar can file a suit or if Akbar refuses to buy, Amar can file a suit in the court of law for the breach of the contract.




Ram offers to pay Rahim a sum of ₹ 2,000 if Rahim kills Robert. It is not a valid contract since the object is unlawful. Hence, it is only an agreement but not a contract, as it cannot be enforced in the court of law. In case of breach either party cannot go to court of law.


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