An agreement which fulfils all the essentials prescribed by law on the basis of its creation. For examples offers to sell his car for Rs.2,00,000 to T.T agrees to buy it. It is a Valid Contract.

An Alien enemy is a person who is a citizen of a foreign country. An alien enemy is therefore a person whose country is at war with India.

A contract is like a promise between people. Each person or organisation who agrees to do something in a contract is called a party. An agreement, or a contract, says what you and the other person or organisation have agreed to do. It is a written list of the promises you have made.

Persons completing 18 years and attained the age of majority, who is of sound mind and not disqualified by any law can enter into a contract.

Law means a 'set of rules' which governs our behaviour and relating in a civilized society. So, there is no need of law in a uncivilized society.

As per the Indian Contract Act, 1872, a "contract" is an agreement enforceable by law. The agreements not enforceable by law are not contracts. An "agreement" means 'a promise or a set of promises' forming consideration for each other. A promise arises when a proposal.is accepted. By implication, an agreement is an accepted proposal. In other words, an agreement consists of an ' offer' and its 'acceptance'.
Agreement = offer/Proposal + Acceptance
Contract = Agreement + Enforceability by law.

Agreements are all in the following types:
1. Agreement no enforceable by law - Any essential of a valid contract is not available.
2. Agreement enforceable by law - All essentials of a valid contract are available.

Promisor:
A person who makes a promise. The person who has become obliged through a promise towards another.
Promisee: 
A person to whom a promise is made. If a promisee accepts the performance of the promise by a third person he cannot afterwards enforce it against the promisor.

Every promise and set of promises forming consideration for each other is an agreement. In short, Agreement = Offer + Acceptance

(i) According to Section 2(a) of the Indian Contract Act 1872, defines proposal as "When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other person either to such act or abstinence, he is said to make a proposal or offer."
(ii) The person who makes the proposal is generally called the 'offeror' and the person to whom it is made is called the 'offeree'.
(iii) Example: 'A' offers to sell his car to 'B' A is making an offer to do something i.e. to sell his car.

(i) Executed contract:
(1) A contract in which both the parties have fulfilled their obligations under the contract.
(2) For Example: 'X' contracts to buy a car from 'Y' by paying cash and 'Y' instantly delivers his car.
(ii) Executory contract:
(1) A contract in which both the parties are yet to fulfil their obligations, it is said to be an executory contract.
(2) For Example: A agrees to buy 'B's cycle by promising to pay cash on 15th June. 'B' agrees to deliver the cycle on 20th June.
(iii) Unilateral contract:
(1) Unilateral contract is a one-sided contract in which only one party has to perform his promise or obligation.
(2) For Example: 'X' promises to pay 'Y' a sum of Rs 10,000 for the goods to be delivered by 'Y'. 'X' paid the money and 'Y' is yet to deliver the goods.
(iv) Bilateral contract:
(1) A contract in which both the parties commit to perform their respective promises is called a bilateral contract.
(2) For Example: 'R' offers to sell his flat car to 'S' for Rs 10,00,000 on acceptance of 'R's offers by 'S', there is a promise by 'R' to sell the car and there is a promise by 'S' to purchase the car, there are two promises.

Sl.No	Basis	Contract	Agreement
1	Definition	A contract is an agreement enforceable by law	An Agreement is every promise or every set of promises forming consideration
2	Enforceability	Every contract is enforceable	Every promise is not enforceable
3	Inter-relation-ship	A contract includes an agreement	An Agreement does not include a contract
4	Validity	Only legal agreements are called contracts.	An agreement may be both legal and illegal
5	Legal obligation	Every contract contains a legal obligation	It is not necessary for every agreement to have legal obligation.

Essentials of a Valid Contract:
"All agreements are contracts, if they are made by free consent of the parties, competent to contract, for a lawful consideration and with a lawful object, and not hereby expressly declared to be void" Sec.10.
a) Offer and Acceptance:
There must be two parties to an agreement namely one party making the offer and the other party accepting it.
b) Legal Relationship:
1. The parties must have the intention to create legal relationship between them.
2. An agreement of Social or domestic nature is not at all a contract.
c) Lawful Consideration (quid pro quo):
1. As per Contract Act under Sec.2(d) Consideration means something in return.
2. A contract without consideration becomes invalid.
3. It may be in cash or kind or in any form as specified in the act.
4. Consideration must not be unlawful, immoral or opposed to the public policy.
d) Lawful Object (Section 23):
1. The object of agreement should be lawful and legal.
2. It must not be immoral, illegal or opposed to public policy.
3. Two persons cannot enter into an agreement to do a criminal act.
e) Free Consent (Section 13 & 14):
1. Consent of the parties must be free and genuine.
2. Consent means agreeing upon same thing in the same sense at the same time i.e. there should be consensus-ad-idem.
3. Consent is said to be free when it is not caused by coercion, undue influence, fraud, misrepresentation or mistake.
f) Capacity of Parties (Section 11):
1. The parties to a contract must have capacity (legal ability) to make valid contract.
2. The Indian contract Act specifies that every person is competent to contract provided
a) is of the age of majority according to the Law which he is subject to, and
b) who is of sound mind and
c) is not disqualified from contracting by any law to which he is subject to an alien enemy, foreign sovereigns and accredited representative of a foreign state, insolvents and convicts are not competent to contract.
g) Certainty of Terms (Section 29):
1. The agreement should be clear to the parties of the agreement.
2. The agreement must be precise. For example X informs Y "I agree to sell my car".
3. X has four cars. Here nothing is stated about which car he is going to sell. There is no clarity of terms.
h) Possibility of Performance (Section 56):
1. The terms of the agreement should be capable of performance.
2. An agreement to do an act, impossible in itself cannot be enforced.
3. For example  A agrees to B to discover a new planet.  The agreement is void because the act in itself is impossible to be performed from the very beginning.
i) Not declared Void:
The agreement should be such that it should be capable of being enforced by law. Certain agreements have been expressly declared illegal or void by the law.
j) Necessary Legal Formalities:
1. A contract may be oral or in writing. Where a particular type of contract is required by law to be in writing and registered, it must comply with necessary formalities as to writing, registration and attestation.
2. If legal formalities are not carried out then the contract is not enforceable by law.