The Contract Act-1872

Types of Contracts

 

On the basis of Validity:

1.1. Valid contract:

An agreement which has all the essential elements of a contract is called a valid contract. A valid contract can be enforced by law.

2. Void contract :

An agreement not enforceable by law is said to be void. A void agreement has no legal effect. It confers no rights on any person and creates no obligations.

3. Void able contract:

A void able agreement is one which can be avoidable. Until it is avoided, it is a good contract.

“An agreement which is enforceable by law at the option of the one or more of the parties, thereto, but not at the option of the others, is a void able contract. 

Example-X coerces Y into entering into a contract for the sale of Y’s house to X. This contract may be avoided by Y. X can not enforced the contract. But Y, if he so desires, can enforce it against X. 

4. Illegal contract:

A contract is illegal if it is forbidden by law; or is of such nature that, if permitted, would defeat the provisions of any law or opposed to public policy. These agreements are punishable by law. These are "void-ab-initio".

“All illegal agreements are void agreements but all void agreements are not illegal.”

Example-an agreement to commit murder, robbery or cheating. 

5. Unenforceable contract:

Where a contract is good in substance but because of some technical defect cannot be enforced by law is called unenforceable contract. These contracts are neither void nor void able. 

 

On the basis of Formation:

1.1.Express contract:

Where the terms of the contract are expressly agreed upon in words (written or spoken) at the time of formation, the contract is said to be express contract.

2. Implied contract:

An implied contract is one which is inferred from the acts or conduct of the parties or from the circumstances of the cases. Where a proposal or acceptance is made otherwise than in words, promise is said to be implied. 

 

On the basis of Performance:

1. Executed contract: An executed contract is one in which both the parties have performed their respective obligation.

2. Executory contract: An executory contract is one where one or both the parties to the contract have still to perform their obligations in future. Thus, a contract which is partially performed or wholly unperformed is termed as executory contract.

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