. . .
types of contracts
0 0
Read Time:4 Minute, 56 Second

A. Basis of Enforceability.
i. Valid contract.
ii. Void contract.
iii. Voidable contract.
iv. Illegal contract.
v. Unenforceable contract.

B. Basis of Formation.
i. Express contract
ii. Implied contract
iii. Tacit contract
iv. Quasi-contract
v. E contract

C. Basis of Performance.
i. Executed
ii. Executory a. Unilateral b. Bilateral

A. Basis of Enforceability.

i. Valid Contract. ICA, 2(h)

All essential elements of Section 10 of the ICA can be enforced by law. A contract which is
enforceable by law fulfils all the essentials is said to be a valid contract.
Example: M is a major person and proposes to F for marriage and F accepts M’s proposal for
marriage, this is a valid contract.

ii. Void Contract. ICA, 2(j)

A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable.
Example: Kanye encountered throat cancer which seized the contract, void (Super Vening).
Does not fulfil all the essential elements of the law.

Example: X makes a contract with Y. X will sell his goat to Y, Y accepts to purchase X’s goat and X
wants to sell it for Rs.7000. When Y goes to buy X’s goat, the goat was already dead. This contract
is void as when Y went to buy X’s goat it was already dead.

Note: the word stop and cease mean different in contract, stop means stopped doing it on his/her
own will. Cease meaning has not stopped of his own will, has been asked to do so (this is enforced
by law).

iii. Voidable Contract. ICA, 2(i)

A contract is enforceable at the option of one or more parties but not at the option of others.
Any party can make a contract void because of the use of coercion, misrepresentation, and fraud.

Example: someone points a Knife at me and tells me to sell my 7000 rupees phone for 2000 rupees,
at this moment due to the fear of the knife, I will sell my phone for 2000 rupees. If I want I can
make this contract void or not if I do not want to.

iv. Illegal Contract. ICA, 23

It is forbidden by law. The court will not enforce such a contract, as this does not fulfil the
essentials of law.

Example: A and B think that they should start an alcohol business in Bihar, it is illegal to sell or
start an alcohol business in Bihar as it is banned by the Government. Hence, A and B are performing
illegal business the contract is illegal to contract.

v. Unenforceable Contract

This is good in substance but suffers technical defects. A contract which has technical issues, faults or
due to some mistakes is not enforceable and is called an unenforceable contract.

Example: i) A promissory note is printed on A4 paper instead of stamp paper.
ii) There is no signature or stamp.

B. Basis of Formation.

i. Express Contract

The contract is made by either word written or spoken.

Example: a) Sameer rented a house to Satish by executing a written agreement (Rent Agreement).
b) I want to sell my watch for Rs.2000 and I say it in spoken words or written words are called a
Express Contract.

ii. Implied Contract

This implies a contract even though parties never intended, where a proposal or acceptance is made
otherwise than in words.

Example: a) A Swiggy parcel is delivered to the wrong address by the delivery executive, there is an
implied contract where the wrong house person is supposed to return the parcel to the correct
b) In Railway Station when a coolie is lifting your bag, it is implied that you will pay him.

iii. Tacit Contract

Understood by the conduct of the party.

Example: when we are boarding a bus, the bus is one party and when we step in we are accepting the
offer. Thus Implied to pay for the ticket.

iv. Quasi Contract

It is a contract where the intention on the part of either of the party is not to make a contract but to law
imposes a contract.

Example: I lost a mobile, Mr.X found it on the road. It is an obligation of the person who finds it to
return it to the true owner. The contract is made by law, Quasi Contract.

v. E Contracts

When a contract is entered into by parties by using electronic means such as emails is known as E

C. Basis of Performance.

i. Executed

Consideration could be an act or forbearance, when the contract has been performed it will be said
to be executed.
Example: A and B agree on selling rice. A is willing to pay Rs.500 for 5kg of rice, and B agrees to sell
5kg rice to A for Rs.500. A gives B Rs.500 and B gives A 5kg rice in return this is called an executed contract.

ii. Executory

The contract is still needed to be fulfilled, the performance is still to be completed. In this the rights
and responsibilities of both parties are not executed.

Example: A and B came into a contract, A says to B that he will pay Rs.1000 to B and in return, B
has to purchase a clock for A. Neither did A give Rs.1000 to B and neither did B purchase a clock
for A. A and B did not fulfil their rights and responsibilities towards the contract this is called
Executory contract.

a) Unilateral
When the contract has been completed by one party but is still left for the other party to complete.

b) Bilateral
When the obligation or promise is outstanding on both parties. Both parties do not fulfil
their rights and responsibilities.

Example: A tells B that he will pay Rs.100 and in return, B has to deliver 4kg rice to A’s home,
neither did A give Rs.100 to B and neither did B deliver 4kg rice to A’s home. They came into a
contract but did not fulfil the responsibilities this is called a bilateral contract.

0 %
0 %
0 %
0 %
0 %
100 %