Law of Contract (1872):Nature of contract; Classification; Offer and acceptance; Capacity of parties to contract; Free consent; Consideration; Legality of object; Agreement declared void

1.3 Classification of Contract/Types of contract 

1. On the basis of the mode of formation

  • Express contract
  • Implied contract
  • Quasi-contract

2. On the basis of performance

  • Executed contract
  • Executory contract
  • Partly executed and partly executory
  • Unilateral contract
  • Bilateral contract

3. On the basis of Validity or Enforceability

  • Valid contract
  • Void contract
  • Voidable contract
  • Illegal agreement
  • Unenforceable contract

1. On the basis of the Mode of Formation

  • Express Contracts : A contract would be an express contract if the terms are expressed by words or in writing. Section 9 of the Act provides that if a proposal or acceptance of any promise is made in words the promise is said to be express.
  • Implied Contract: An implied contract is a contract which is made otherwise than by the words spoken or written. It came into existence on account of an act or conduct of the parties.
  • Quasi contract: Even in the absence of a contract, certain social relationships give rise to certain specific obligations to be performed by certain persons. These are known as quasi contracts as they create same obligations as in the case of regular contract. Quasi contracts are based on principles of equity, justice and good conscience.

 2. On the basis of performance

  • Executed contract: The consideration in a given contract could be an act or forbearance. When the act is done or executed or the forbearance is brought on record, then the contract is an executed contract.
  • Executory contract: In an executory contract the consideration is reciprocal promise or obligation. Such consideration is to be performed in future only and therefore these contracts are described as executory contracts.
  • Partly executed and partly executory: In a partly executed and partly executory contract, one party has already performed his promise and the other party has yet to execute his promise.
  • Unilateral contract: Unilateral contract is a one sided contract in which only one party has to perform his duty or obligation.
  • Bilateral contract: A Bilateral contract is one where the obligation or promise is outstanding on the part of both the parties.

3. On the basis of Validity or Enforceability

  •  Valid contract: If the contract entered into by the parties and satisfies all the elements of a valid contract as per the act, it is said to be a valid contract.
  • Void contract: A contract which ceases to be enforceable by law is known as a void contract. A void contract is not enforceable by the court. Generally, a valid contract ceases to be enforceable on the change in circumstances or on the change of provisions of an act.
  • Voidable contract: When the contract is entered into without the free consent of party, it is considered as a voidable contract. The definition of the act states that a voidable contract is enforceable by law at the option at the option of one or more parties but not at option of the other parties.
  • Illegal Agreement: An illegal agreement is one which is forbidden by law. It cannot be enforced by any court. Not only that any associated or collateral transaction to an illegal agreement is also void. No action is allowed on an illegal agreement. No action can be taken for the recovery of the money paid under illegal agreement or for the breach of the illegal agreement.
  • Unenforceable contract: A contract which satisfies all the requirements of the contract but has technical defects is called an unenforceable contract. A contract is said to have a technical defect when it does not fulfil the legal formalities required by some other act. When such legal formalities are compiled with later on, the act becomes enforceable.

 

 

Law of Contract (1872):Nature of contract; Classification; Offer and acceptance; Capacity of parties to contract; Free consent; Consideration; Legality of object; Agreement declared void

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