NAME : AYMEN IMTIAZ

ROLL NO : 5313

DEPARTMENT : MANAGEMENT SCIENCES

SEMESTER : BBA(6th)

SUBJECT : BUSINESS LAW

INSTRUCTOR : SIR ASIM

ASSIGNMENT#1 : AGREEMENT AND CONTRACT

 ASSIGNMENT OF BUSINESS LAW

1-DIFFERENCE BETWEEN AGREEMENT AND CONTRACT:

1.1-Definition of Agreement:

“When a person (promisor) offers something to someone else (promisee), and the
concerned person accepts the proposal with equivalent consideration, this
commitment is known as the agreement.”

1.2-Definition of Contract:

“To be precise, a legally enforceable agreement for doing or not doing an act is
known as a contract.”

1.3-Differentiation chart:

AGREEMENT CONTRACT

1. Promises and commitment forming An agreement which is legally enforceable

consideration for the parties under same
consent known as agreement.
2. Major elements are offer and acceptance
that make the agreement
3. It may or may not create league
obligation
4. Its scope is wide as it covers every type
of an agreement as well as contract
5. Every agreement is not a contract
by law is known as contract.
An agreement and its enforceability make a
contract which is its element
It is necessary for contract to create legal
obligation
Its scope is relatively narrow because it
covers only agreement enforceable by law
Every contract is an agreement

6. An agreement need not to be given in A contract normally be written or registered

written
7. All agreements are not binding on the All contract are binding on the concerned
concerned parties
 8. Example:
Ali promises to sell mobile to Asad for There is written agreement between
10,000 Rs/- this is an agreement as it has contractor and supplier for the raw material
free consent and consideration. to deliver to be delivered in return of money
50000/-.

2-ESSENTIAL OF A VALID CONTRACT:

I. OFFER AND ACCEPTANCE:

In order to form an agreement , there must be an offer by one party and an acceptance
of that offer by the other part.
EXAMPLE:
A shopkeeper gives offer to sell a mobile for 5000 Rs. And a buyer accept his offer
so, it is agreement between the two parties.
II. LEGAL OBLIGATION:
There must be a clear intention among the parties that the agreement should be
attached by legal consequences and create a legal obligation.it means if one party
doesn’t fulfill his promise he shall be liable to breach of contract.
EXAMPLE:
A contractor agrees and give written to deliver material to a construction company at
30000/- in a week if doesn’t provide it in time then he is legally breach the contract
and can taken to court
III. LAWFUL CONSIDERATION: 
Third essential element of the valid contract is a consideration, means something in
return which must be supported by lawful consideration on both the sides so,
consideration it the price paid by one party for the promise of the other party.
EXAMPLE:
There is an agreement between the property dealer to sell the house for 10lac to a
party so 10 lac is consideration for property dealer and house is consideration for the
second party.
IV. COMPETENT PARTIES:
An agreement is enforceable if it is made by parties who are competent to contract
and for that parties .
  Must attain the age of majority ( an agreement with a minor is void Contract )
 Person of sound mind-  
 The person should not be disqualified by law  

EXAMPLE:
A 16 year old boy agrees to sell his father’s land to 10 acre a party for 20lac as it is a
contract with minor so , not valid contract or obligated to law,
V. FREE CONSENT:
 Free consent of the parties is another essential of the contract; consent is said not to
be free when it is;

1. Coercion
2. Undue influence 
3. Fraud 
4. Misrepresentation 
5. Mistake 

EXAMPLE: When contract is made forcefully at gunpoint between the Parties where
free will of any party is not there.

VI. LAWFUL OBJECT :

For the formation of a contract, it is also necessary that the parties to an agreement
must agree to a lawful object. The object must not be fraudulent or illegal or immoral
or against the public policy or must not imply injury to the person or for any other
reason.

EXAMPLE:
if A forces B to sign a contract for murdering C. This is not a lawful
object. Hence, the contract will be void.
VII. WRITING AND REGISTRATION :
A contract must be oral or in written however, if the contract is in writing it is easy to
prove in court as it is signed or stamped so it fulfill the requirement
EXAMPLE:
 A verbally promises to sell his book to Y for 200Rs. It is valid contract because the
law doesn’t require it to be in written
VIII. CERTAINTY OF THE TERMS :
The terms of an agreement must be clear , complete and certain if the terms are not
certain and clear to any if the parties then the agreement will be void.

EXAMPLE:
Ali promise to sell his black car to Aqib for 10 lac but Aqib perceives that Ali is
selling his Red Toyota so, there is no clarity between the two so, its void contract.
IX. POSSIBILITY OF PERFORMANCE:
A valid contract must be capable of being performed .an agreement to perform an
impossible act is void contract.

EXAMPLE:
A Doctor agrees to put life into the Patients body in return of money which is
impossible.
X. NOT EXPRESSLY DECLARED VOID:
An agreement must not be one of those, Which have been expressly declared to be
void by law. agreement without consideration, agreement in restraint of
marriage, agreement in restraint of trade , agreements in restraint
judicial proceedings, an agreement by way wager etc.

EXAMPLE:
Trade of drugs is forbidden so, if any person do a contract to trade of it then it is void
contract.