types of contract

TYPES OF CONTRACT

ON THE BASIS OF VALIDITY1. Valid Contract An agreement enforceable by law

when all the essential features of a valid contract are present.

2. Voidable Contract A contract becomes voidable when the

consent is not free. Usually a contract becomes voidable

when the consent of one of the parties to the contract is not free.

Eg- A, threatens to shoot B if he does not sell his bike to A. B agrees. This contract is voidable at the option of B

3. Void Contract A void contract is the contract that has

no legal effect at all.“ A contract which ceases to be

enforceable by law becomes void, when it ceases to be enforceable by law.”

ON THE BASIS OF FORMATION 1. Express Contract Contracts formed with the words

spoken or written, is an express contract.

Eg- A tells B on phone that he wants to buy his car for Rs 80,000 and B accepts the offer on phone, this is an express contract.

2. Implied Contract When the offer and acceptance is made

by acts or conducts of the parties, it is an implied contract.

For eg- A, a coolie in uniform takes up the luggage of B at Railway Station and B allows him to do so, then the law implies that B will have to pay for the services of A. This is an implied contract.

3. Quasi-ContractQuasi-contract doesn’t arise by virtue of

any agreement, but the law infers or recognises these contracts under special circumstances.

For eg- Claims for necessaries supplied to an incapable person.

2. Responsibilities of finder of goods.

ON THE BASIS OF EXECUTION 1. Executed Contract A contract is said to be executed

contract when both the parties to a contract have performed their obligations.

For eg- When a bookseller sells a book on cash payment, it is an executed contract because both the parties have done what they were to do in a contract.

2. EXECUTORY CONTRACT When either both the parties to a

contract have still to perform their share of obligation, then it is executory contract.

For eg- A buys a car from B for Rs 100,000. Now, A has made the payment but B has not transferred the contract, it is an executory contract as the parties have to meet the obligation.