 Classification of Contract

 Types of contract
1. On the basis of methods of creation of contract
a. Express and Implied contract
The contract which is made between two or more than two parties orally or in written form is
known as express contract.
The contract which is made by conduct (doing or not doing something by the concerned parties)
not with the help of oral or in written form is known as implied contract.
b. Direct and indirect contract
The contract which is created by mutual consent of two or more than two parties is called direct
contract- no matter whether the consent is made orally or in written form or by the conduct of the
parties.
The contract which is not created by mutual consent of the parties but is constituted by law is
called indirect contract. This kind of contract is also known as quasi contract.
c. Formal and Simple contract
The contract which is created in a written form, sealed, properly signed, and transferred to the
party, is called Formal contract. There is no need of consideration for making such kind of
contract valid. The contract which is made verbally, conduct of the concerned parties, written
contract without seal and signature of the parties is called Simple contract. There is compulsory
needed of consideration for making such kind of contract valid.
2. On the basis of enforceability of contract
a. Valid contract:
A contract which satisfies all the condition or essential elements of valid contract or all
agreements which are enforceable at law is a valid contract. The contract which is made
between two or more than two competent parties by their free consent for lawful object and
consideration to do or not to do anything , which is possible for a man to do and which is
enforceable by law is called valid contract.
b. Void agreement
An agreement which is not enforceable at law or which is made with the lacking of one or more
essential elements of valid contract is said as void agreement.
c. Void contract
A contract which ceases to be enforceable by law becomes void when it ceases to be
enforceable. Contract may be void latter by i) declaring impossibility or illegality ii) by denial
of voidable contract. iii) by being impossible to happen the event in the contingent contract. It
was valid and enforceable when it was made but it becomes void later due to certain
unavoidable reasons, e.g., due to change in law and order, due to destruction of subject matter
of the contract, etc.
 d. Voidable contract
An agreement, which can be made void by the court of law, is called voidable contract. The
contract will be voidable if it is caused by a) coercion, b) undue influence, c) misrepresentation
d) fraud e) in certain case by mistake, or i) when one of party prevent from performing it ii)
when promiser fails to fulfill in time another party may declare the contract as void. The
contract remains valid and enforceable unless it is declared void by the court of law.
e. Illegal contract
The contract made by two or more than two parties to do something prohibited by the
prevailing law is called Illegal contract. The contract becomes illegal when it is made to do
some immoral acts or opposed to the public policy such as contract between two parties for
gambling purpose, for prostitution purpose, for murdering a third person etc.
f. Unenforceable contract
The contract which cannot be enforced by the law because of some technical defects in contract
is known as unenforceable contract. Unsealed contract, unregistered contract verbally made
contracts etc. are the examples of unenforceable contracts.
3. On the basis of performance of contract
a) Executed contract
The contract which has already been performed by both parties is called Executed contract.
This contract is known as complete contract.
b) Executory contract
The contract, which has not been fully performed by both parties, is called Executory contract.
This contract is also known as incomplete contract.
4. On the basis of nature of offer
a) Contract in particular:
The contract in which the offeror has given his/her offer to a particular person, and is accepted
by the same person to whom it was created, is called Contract in particular.
b) The contract in which the offeror has made an offer to a group of persons, and any person
related with that group and having the knowledge of such offer accepts it, is called contract in
general.
5. On the basis of origin of liability of the parties
a) General contract:
General contract is the contract, where the liability of both parties begins from the time of its
inception. Both parties become responsible to perform it by fulfilling their respective promises
as soon as the contract is made.
b) Contingent contract
Contingent contract is the contract where the liability of one of the parties arises only when
some event collateral to such contract happens. In this contract a party will have promised to do
 something in the favor of other on the happening of mentioned event in the contract in coming
future. But the party should not be liable to fulfill his/her promise if the event mentioned in the
contract will not happen in the mentioned time period. Marine contract, fire insurance etc. are
the examples of contingent contract.
6. On the basis of the nature of contractual liability
a) Unilateral contract
Unilateral contract creates legal obligation in only one party. He/she cannot compel the other
party to perform the contract. E.g. A lost his dog and he announces through the medium of the
newspaper that whoever finds out his dog and brings back it to him, he/she will be rewarded
with Rs.1000. B reads the notice and tries his best to find out the dog to get the reward. After
finding out the dog, he brought it back to its owner. According to the promise, A must reward
to B with Rs.1000. Though B seems to the party of contract, he/she is not liable to go in search
of the dog; therefore A cannot compel B to search his dog. It depends upon the wish of B
whether he wants to go in search of dog or not. Here, obligation is created only for A, not for B.
b) Bilateral contract
The contract in which both or all the parties to the contract have the obligation to perform it is
known as Bilateral contract. If any party breaches it, the other party will enjoy every right to
sue hi/her either for its performance or for due compensation for the loss suffered by hi/her
because of its non-performances.