Contracts can be classified on a number of bases. They are:
1. On the basis of
enforceability
(a) Valid Contracts.
(b) Void Contracts.
(c) Voidable
Contracts.
(d) Illegal Contracts.
(e) Unenforceable
Contracts.
2. On the basis of mode
of creation
(a) Express Contracts.
(b) Implied Contracts.
(c) Quasi Contract
3. On the basis of the extent of execution.
(a) Executed
Contracts.
(b) Executory Contracts.
4. On the basis of
execution
(a) Unilateral
contracts.
(b) Bilateral
contracts. .
1. Classification on
the basis of enforceability.
(a) Valid Contracts:-
Contracts which
satisfy all the essentials of a valid contract as laid down in Sec. 10, are
termed as valid contracts. Only valid contracts are enforceable in a court of
law.
(b) Void Contracts:-
An agreement may be enforceable at the time when it was
entered into but later on, due to certain reasons, for example impossibility or
illegality of the contract, it may become void and unenforceable. Such
contracts are called void contracts. As per Section 2(j) provides that "a
contract which ceases to be enforceable by law becomes void when it ceases to
be enforceable."
Example: X, by exercising coercion over Y, makes him agree to
sell his house worth Rs.50,000 for a mere sum of Rs. 1,000. The agreement is
voidable at the option of Y. In case Y decides to rescind the contract, it
becomes void between X and Y.
(c) Voidable Contracts
:-
as per Sec. 2(i) “An agreement, which is enforceable by law
at the option of one or more of the parties thereto, but not at the option of
other or others, is a voidable contract”. Agreements induced by coercion, undue
influence, fraud or misrepresentation are voidable at the option of the party
whose consent has been so obtained.
For example: Devendra threatens to kill Khushal if he does
not give him a loan of Rs. 50,000 for 25 years. Khushal gives the loan. This is
a voidable contract as consent of Khushal is obtained by coercion.
(d) Illegal or unlawful
contract: -
An agreement which is either prohibited by law or otherwise
against the policy of law is an illegal agreement. Such an agreement is a
nullity and is void.
Example :- Samir agrees with Rahul to Purchase brown Sugar is
an illegal agreement.
(e) Unenforceable Contracts:-
An unenforceable contract is that which is valid and
enforceable, but for certain technical defects such as want of proof, expiry of
the period within which enforceable, absence of writing, registration and
attestation, insufficient stamp etc., it becomes unenforceable.
Example :- If a
document embodying a contract is under stamped, the contract is unenforceable,
but if the requisite stamp is affixed (if allowed), the contract becomes
enforceable.
2. On the basis of mode
of creation :-
(a) Express Contracts
:-
An express contract is one where the terms are clearly stated
in words, spoken or written. For example, A wrote a letter to B stating "I
offer to sell my car for Rs. 300,000 to you ", B accepts the offer by
letter sent to A. This is an express contract. Similarly, when A asks a scooter
mechanic to repair his scooter and the mechanic agrees, it is an express
contract made orally by spoken words.
(b) Implied Contracts
:-
Contracts which come into existence on account of the conduct
and acts of the parties are termed as implied contracts.
For example, if a person takes a seat in a bus. His act shows
that he has entered into an implied contract that he will pay the specified
fare to the bus owner for taking him to his destination.
c) Quasi Contract: Under certain circumstances, law
itself creates legal rights and obligations against the parties. These
obligations are known as quasi contracts. For example: A supplies B, a lunatic
with necessaries suitable to his condition in life. A is entitled to be reimbursed
from B’s property.
3. On the basis of the
extent of execution :-
a) Executed Contracts
:-
It is a contract where
both the parties have fulfilled their respective obligations under the
contract.
For example, Akshay agrees to sell his book to Bhavi for Rs.
300. A delivers the book to Bhavi and Bhavi pays Rs. 300 to Akshay. It is an
executed contract.
(b) Executory Contracts
:-
When one or both the parties to the contract have still to
perform certain things in future, the contract is termed as an executory
contract.
For example, A agrees
to sell a book to B for Rs. 30. If the book has not been delivered by A and B
has not paid the price. the contract is executory.
4. On the basis of
execution :-
(a) Unilateral
contracts :-
A contract is said to
be unilateral where one party has performed his obligation either before or at
the time when the contract comes into existence, whereas the other party is yet
to perform his obligation.
For example: A, a coolie, puts B’s luggage in the carriage.
The contract comes into existence as soon as the luggage is put. It is now for
B to perform his obligation by paying the charges to the coolie.
(b) Bilateral contracts
:-
A bilateral contract is one in which both the parties have to
perform their respective promises or obligations to do or forbear.
Example: A agrees to sell his car to B after a month. B
promises to pay the price on the delivery of the car. The contract is
bilateral.
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