Are Agreements Contracts

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Assignment Question 1. All contracts are agreements and not all agreements are contracts. Discuss this statement in relation to the formation of contract by an intention to create legal relation. No doubt it may be a valid and true statement. An agreement is merely a form of reference between different parties for it fulfilment rather than being in any enforceable way. The latter is defined as a contract that is legally binding of promises that the law will enforce. However, for enforceability both parties involved must have accepted with consideration and must intend to create legal relation as it is the integral part of contract. Thus, we will further critically examine circumstances that support the statement were contracts are legally binding and when considered as mere agreements between parties. An agreement may be written, oral and lies upon the honour of the parties and not in a way enforceable. All contracts are agreements because there must be a mutual understanding between two parties for contract to be formed. They adhere to the terms and conditions of the offer. The following cases illustration will illustrate that contracts are agreements. One example may be in situation were invitation to treat exists between parties, so offers made between them are not binding upon agreement. It’s safe to say that when a firm’s offer is accepted it results into a contract provided other elements of contracts are accepted. Considering person buying a radio on hire purchase both parties must come to an agreement on payment of monthly instalment within specified period of time. Such an agreement will result to specially contract which a contract under seal. All contracts are agreements until avoided, for example, both the parties to an agreement must agree about the subject matter of the agreement in the same sense and at the same time. Under legal obligation, an
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