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.” Now the question arises, `What is promise?’ According to Section 2(b) of the Indian Contract Act, 1872, “A proposal when accepted, becomes a promise.”
Example: X offers to sell his car for Rs 1,00,000 to Y. Y accepts this offer This offer after acceptance becomes promise and this promise is treated as an agreement between X and Y.
Agreement = Offer (or Proposal) + Acceptance of Offer (or Proposal)
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