The paper investigates whether a leasehold interest in property law is a contract or an estate. Attempt to answer the question began with tracing the history and evolution of leases and the true character of the lease. Originally leases were regarded as personal contracts, operating in personam, between the parties and not creating or transferring any rights in rem that is, rights in the land itself. As the lease evolved and developed as a legal concept, the leaseholder was able to recover his land from all strangers and by this it could no longer be denied that he had an estate in the land (right in rem) or that he held it in tenure It argues that a lease is a contract that confers an estate on the lessee and therefore partakes both of contract and estate. The paper also inquires whether a lease can be frustrated in law.