Definition of Contract

The term ‘contract’ is defined in Section 2 (h) of the Indian Contract Act, as under:
“An agreement enforceable by law is a contract.”
This means that contract is a combination of an agreement and the enforceability of the agreement We can say that:

Contract = An agreement + Enforceability.

The definitions of the terms ‘agreement’ and ‘promise’ are relevant to understand the meaning of contract.

The term ‘agreement’ is defined in Section 2 (e) of the Indian Contract Act, as under:

“Every promise and every set of promises forming the consideration for each other, is an agreement.”

And the term ‘promise’ is defined in Section 2 (b) of the Indian Contract Act, as under: “A proposal, when accepted, becomes a promise.”

The above two mentioned provisions show that an agreement is an accepted proposal (offer). Thus, every agreement consists of an offer from one party and its acceptance by the other. We can say that:

Agreement = Offer + Acceptance.

Every agreement is not a contract. It is regarded as contract only when it is enforceable by law. The conditions of enforceability of agreement are laid down in Section 10 of the Indian Contract Act.

Conditions of Enforceability
The conditions of enforceability of an agreement as laid down in Section 10, are:-

1. The Agreement must be made by the free consent of the parties.
2. The agreement must be made by the parties who are competent to contract.
3. The agreement must be made for a lawful consideration and with a lawful object.
4. The agreement must not be expressly declared to be void.