Agreements and contracts; mental acceptance

(i)True A contract is an agreement enforceable by law (s. 2(h)); an agreement is “every promise and every set of promises forming the consideration for each other” (s. 2(e)). So a contract is an agreement plus legal enforceability. Every contract is therefore an agreement, but an agreement becomes a contract only if it has the essentials of section 10 (free consent of competent parties, lawful consideration and object, and not being expressly declared void), together with an intention to create legal relations, an essential the courts add to section 10. A social or domestic agreement, such as a father's promise of a monthly pocket allowance to his son, is an agreement but not a contract, so the son cannot sue for it. Hence all contracts are agreements, but all agreements are not contracts.

(ii)True Acceptance must be expressed and communicated to the offeror; a decision to accept that stays in the offeree's mind creates no contract. Where A proposed marriage to B and B told only A's sister that she accepted, and the sister did not tell A, there was no contract, because the acceptance was never communicated. For the same reason mere silence is not acceptance: an uncle who wrote that he would treat the horse as his if he heard nothing more acquired no contract when the nephew did not reply (Felthouse v. Bindley).