The term ‘contract’ is derived from the Latin word ‘Contractum’ which means ‘drawn together’. A Contract brings (or) draws the parties together and establishes legal relationship between them. An agreement is the basis of contract. An agreement comes into existence when ever one (or) more persons promise to one (or) others, to do (or) not to do something. An agreement which can be enforced through the courts of law is called a contract.