“An Agreement” is defined in Section 2 (e) of the Contract Act as “Every promise and every set of promises forming the consideration for each other.” In this context a promise refer to a proposal /offer which has been accepted, in other words, an agreement consists of an offer by one party and its acceptance by the other.

Thus, Agreement = Offer + Acceptance i.e., for an agreement there must be at least two parties, one making an offer and the other accepting it. A person cannot enter into agreement with himself. Another aspect relating to an agreement is that the parties to an agreement must have an identity of minds in respect of the subject matter. The proposer and acceptor must agree on the same thing in the same sense. This is also called consensus-ad-idem.