Section 2 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Clauses (e) to (j) of section 2 define the six words that decide whether a deal can be enforced: agreement, reciprocal promises, void agreement, contract, voidable contract, and a contract that becomes void. The key idea is that every contract is an agreement, but an agreement is a contract only if the law will enforce it.
Every promise and every set of promises forming the consideration for each other is an agreement (2(e)). An agreement not enforceable by law is void (2(g)); an agreement enforceable by law is a contract (2(h)). An agreement enforceable at the option of one or more of the parties but not of the other or others is a voidable contract (2(i)). A contract that ceases to be enforceable becomes void when it ceases to be enforceable (2(j)). Section 2 has no illustrations in the text.
The six clauses at a glance
| Clause | Term | The Act's wording, in short |
|---|---|---|
| 2(e) | Agreement | Every promise and every set of promises, forming the consideration for each other |
| 2(f) | Reciprocal promises | Promises which form the consideration or part of the consideration for each other |
| 2(g) | Void agreement | An agreement not enforceable by law |
| 2(h) | Contract | An agreement enforceable by law |
| 2(i) | Voidable contract | Enforceable by law at the option of one or more parties, but not at the option of the other or others |
| 2(j) | Contract that becomes void | A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable |
Clauses (a) to (d) are covered in our articles on proposal, acceptance and promise and on consideration. If you are unsure whether a deal you have made is a contract, a void agreement or a voidable one, our legal consultation service can look at it with you.
Clause (e): agreement
"Every promise and every set of promises, forming the consideration for each other, is an agreement". A single promise is an agreement on this wording. A set of promises that are each other's consideration, such as a promise to deliver goods and a promise to pay, is also an agreement. This clause builds on the idea that a proposal, when accepted, becomes a promise (2(b)).
Clause (f): reciprocal promises
"Promises which form the consideration or part of the consideration for each other are called reciprocal promises". The Act uses the term later, in the part on performance, so the definition matters. Note the words "or part of the consideration": the promises need not be each other's whole consideration. We cover the later rules on reciprocal promises in separate articles in this series.
Clause (g): void agreement
"An agreement not enforceable by law is said to be void". A void agreement creates no right the law will enforce. Later sections name agreements the Act declares void, for example agreements with unlawful consideration or object (section 23), agreements in restraint of marriage (section 26), and wagering agreements (section 30). See our overview of void and voidable contracts, sections 24 to 30.
Clause (h): contract
"An agreement enforceable by law is a contract". This is the heart of the difference between the two words. Agreement is the wider word; contract is the narrower. Section 10 tells you which agreements are contracts: those made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and not expressly declared void. See our article on section 10.
Clause (i): voidable contract
"An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract". Here the contract exists and is enforceable, but only one side (or some sides) can choose to enforce it, and the other cannot. Section 19 gives the standard example: where consent is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.
Clause (j): a contract that becomes void
"A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable". The clause deals with a contract that starts valid and later stops being enforceable. The word "becomes" marks the timing: the contract is void from the moment it ceases to be enforceable. Later sections of the Act give instances, such as section 32, where a contingent contract becomes void if the event becomes impossible. We cover contingent contracts in a separate article in this series.
Comparing the four states
| State | Enforceable? | Who can choose? | Where the Act gives examples |
|---|---|---|---|
| Void agreement (2(g)) | Not enforceable by law | No one | ss.23, 24, 25, 26, 27, 28, 29, 30 |
| Contract (2(h)) | Enforceable by law | Either side can enforce | s.10 |
| Voidable contract (2(i)) | Enforceable at the option of one or more parties only | The party whose option it is | ss.19, 19A |
| Contract that becomes void (2(j)) | Stops being enforceable | No one, from that point | e.g. s.32 |
A modern example (ours, not the Act's)
Tara and Vivek agree that Tara will paint Vivek's shop for a fixed sum. Each promise is the consideration for the other, so there is an agreement (2(e)), and the two promises are reciprocal promises (2(f)). If the agreement meets the conditions of section 10, it is a contract (2(h)).
Change the facts. Vivek was pushed into the deal by a threat. Under section 19, the contract is voidable at Vivek's option, so it is a voidable contract (2(i)). Change them again. Tara agrees to paint the shop only if a particular licence is granted by Friday, and the licence is refused. The Act's rules on contingent contracts apply: the contract may become void when the event becomes impossible, which is clause (j) in action.
What can the parties change?
These are definitions, so the parties cannot redefine them. But they can shape the facts the definitions apply to: they decide what promises they make, what the consideration is, and what conditions attach to performance. They cannot make a void agreement enforceable simply by saying it is a contract; the test in 2(h) is whether the law will enforce it.
Practical points
- "Agreement" is not a safe word for "enforceable". Check section 10 before relying on a deal.
- Voidable is not void. Until the option is exercised, the contract is enforceable.
- Act promptly if you hold the option. The Act's later sections deal with the effects of avoiding a contract; delay can create difficulties, which case law and the facts decide.
- Document the conditions. If a contract depends on an event, write down the event and the date.
Need help with the status of your agreement?
If you are not sure whether a deal is enforceable, voidable or void, our legal consultation team can review the documents and the facts with you and explain the position under this Act before you act on it.
Key takeaways
- Every contract is an agreement, but an agreement becomes a contract only if enforceable by law (2(e), (h)).
- An agreement not enforceable by law is void (2(g)).
- A voidable contract is enforceable at the option of one or more of the parties, not of the others (2(i)).
- A contract that ceases to be enforceable becomes void at that point (2(j)).
Read next
- Section 2(a) to (c): proposal, acceptance and promise
- Section 10: what agreements are contracts
- Void and voidable contracts: sections 24 to 30
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.