Contract
When parties agree on certain terms and conditions, they make a contract. In simple words, an agreement with a legal obligation becomes a contract. When there is a breach of contract, the Indian Contract Act, 1872 provides for the remedies. As per the Section 2(h) Indian Contract Act, 1872, the contract is an agreement enforceable by law.
Different forms of contract
The different contracts are:
A. Based on the formation
- Express Contract
Express Contracts are those contracts where there is an expression either orally or in writing. For example, A has offered to sell his house and B has given acceptance. It is an express Contract.
- Implied Contract
The Contracts where there is no expression are called implied contracts. For e.g. sitting on a Bus can be taken as an example of an implied contract between passenger and owner of the bus.
Also Read: Essentials of a Valid Contract
B. Based on Consideration
- Unilateral Contract
In a unilateral contract, consideration is moved in only one direction
- Bilateral Contract
In a bilateral contract, consideration is moved in both directions after the contract.
C. Based on Execution
- Executed Contract
If the performance of the contract is complete, it is an executed contract.
- Executor Contract
Where the contractual obligations will take place in the future, it is an executor Contract.
D. Based on the Validity
- Valid Contract
The contracts enforceable in a Court of law are valid Contracts. Section 10 of the Indian Contract Act, 1872 states the essentials of the valid contracts.
- Void Contracts
If a Contract is not enforceable in a Court of Law, it is a void contract.
- Voidable Contract
Unlike a void contract, voidable contracts can be rejected or accepted at the option of the unbound party. These contracts take place without the free consent of both the parties. We can say there is physical or mental pressure on one of the party. At the option of the suffering party, a voidable contract can become a valid or void Contract.
- Illegal Contract
If a Contract has an unlawful object, it is an illegal Contract.
- Unenforceable Contract
Unenforceable contracts are those contracts which have not properly fulfilled legal formalities. These types of contract suffer from some technical defect like an insufficient stamp, etc. After rectification of the technical defect, it becomes an enforceable or valid contract.
Apart from the types mentioned above, there are also two more types of contract.
Also Read: The concept of free consent under Contract Law
1. Quasi Contract
Since with Quasi-Contract, there will be no offer and acceptance, therefore, there will be no contractual relations between the partners. A contract taking place by the virtue of law is called Quasi Contract. Sections 68 to 72 of the Indian Contract Act, 1872 deals with Quasi-Contract.
2. Contingent Contract
As per section 31 of the Indian Contract Act, 1872 a contingent contract is a contract to do or not to do something, if some event, collateral to such contract, happens. For e.g. X contracts to pay Y Rs. 10,000 for setting Y’s house on fire. This is a contingent contract. If the event of the contingent contract becomes impossible, the contract becomes void. For e.g. X makes a contract with Y to buy Y’s horse if X survives Z. This contract is not enforceable by law unless Z dies in X’s lifetime.