Agreement in Indian Law | Definition, Example & Legal Reasoning

In legal terms, an agreement is the foundation of most contracts and transactions. According to Section 2(e) of the Indian Contract Act, 1872, “Every promise and every set of promises, forming the consideration for each other, is an agreement.” 👉 This means when: One party makes an offer, The other party accepts it, and There is consideration (something of value exchanged), ➡️ An agreement is created. ✅ Example: If A agrees to sell his book to B for ₹500 and B accepts, this is an agreement. ❌ But if A promises to give the book as a gift without anything in return, it is not enforceable in law. 💡 Key Difference: All contracts are agreements, but not all agreements are contracts. Agreements like social promises (e.g., to meet a friend) are not legally binding. For CLAT aspirants, this concept is central to Legal Reasoning and Contract Law.