It means that a legally binding agreement between two parties whereby each party undertake specific obligations or enjoys specific rights awarded by desirable quality of that contract. On the other hand, Concise Oxford Dictionary defines that contract is an agreement enforceable by law. Additionally, it is an promise or a set of promise for the breach of which the low gives a remedy or the performance of which the law in some way recognizes as a duty. And innocent party can take serious action against who broke the contract.
Agreement – A meeting of minds with the understanding and acceptance of reciprocal legal rights and duties as to particular actions or obligations, which the parties intend to exchange; a mutual consent to do or refrain from doing something. It is a simple agreement and won’t take action against even it is broken( not enforceable by law ). An agreement is not always synonymous with a contract because it might lack an essential element of a contract such as consideration.
Essential elements of contract
The law of the contract is one of the most important branches of business law from the formation of the contract, commercial activities begin between two parties in the legal field. The contract helps in the proper functioning of the business. To understand the law of the contract, first contract is need to be defined which was explained above and for the second the basic elements necessary for the formation of a valid contract is need to be described.