Classification of Contract

There is no specific classification of contract. But if

viewed from different angles contract may be classified
as under:

A) Contract, in view of its validity, may be classified into

four categories which are as follows:
i) Valid contract
ii) Void contract
iii) Voidable contract
iv) Unenforceable contract
 Classification of Contract
B) Contract in view of its performance may be of two
types:
i) Executed contract
ii) Executory contract

C) Contract in view of formalities may be divided into two

categories:
i) Formal contract
ii) Informal contract
 Classification of Contract
D) Corntract may be of two types in view of publication:
i) Express contract
ii) Implied contract

Beside the above contracts, the followings types of

contrat are noticed:
• Quasi contract
• Contingent contract
•Contract of indemnity
•Contract of guarantee
 Classification of Contract

•Contract of Bailment
•Illegal Contract
•Contract of Uberrimae fidei
•Contract of Agency
•Oral Contract
 Classification of Contract
Valid contract

The contract, which have its essential elements as

required under the contract law and free from any
flaw is called a valid contract.

A valid contract imposes obligations on the concerned

parties and enforceable by the court of law.
 Classification of Contract
Void contract
The contract which is not formed in accordance with the
provision of law is said to be a void contract. If a party,
by mistake gives consent, in the true sense, it may be
said that no agreement is created there and this type
of contract will be void.
Voidable contract
The contract, which can be avoided or rescinded at the
desire of any party concerned, is called a voidable
contract. Misrepresentation, fraud, undue influence
are important factor in case of voidable contract.
 Classification of Contract
Unenforceable contract
The contract which is valid, but can not be enforceable by
the court due to lack of a formality or procedural
defect, is called an unenforceable contract. But if the
defects are removed then it may be enforceable by
law.
 Classification of Contract
Executed contract
When a party to a contract performs his part is called an
executed contract, though, the act of other party is not
accomplished. Contract of a loan is executed contract,
because the loan is provided by the creditor only the act
of repayment by the debtor remains to be done.
Executory contract
When neither party performs his part is called an executory
contract. Such as, an agreement to sell of a car is made
between A and B. A, as per agreement will pay to B in a
fixed next date and then B will hand over the car. The
act of the both parties will be executed in future. So, this
kind of agreement is called executory contract.
 Classification of Contract
Essential elements of Formal contract
i) Written
ii) signature
iii) Seal
iv) Delivery

Quasi contract:
The contract which is not formed on the basis of voluntary
promise like a contract but creates obligation like a
valid contract, then, this type of contract is said to be a
Quasi contract. Such as, if any person provides
necessary things to a minor or an insane person, the
supplier may recover his dues from the property of the
minor or the insane person. Here no contract was made
but the circumstances create obligation like a contract.
 Classification of Contract
Contingent Contract:
A contingent contract is a contract to do or not to do
something, if some event, collateral to such contract,
does or does not happen. Such as, A and B both have
made a contract on the happening of an accident of B’s
car. That is to say, if B’s car falls in an accident and if it
damaged, A will pay B a sum of TK. 50,000. in respect
of this contract, if the accident happens, then A will
perform his promise.
 Classification of Contract
Contract of indemnity:
A contract by which one party promises to save the other
from loss caused by some events then it is called a
contract of indemnity. Such as, Fire insurance is a
contract of indemnity.
Contract of guarantee:
A contract of guarantee is a contract to perform the
promise or discharge the liability, of a third person in
case of his default . For example, A lends TK. 100000 B.
C guarantees that if A does not repay the money, C will
pay it to A. here A is creditor, B is principal debtor and C
is surety or guarantor. The whole transaction is called
the contract of guarantee.
 Classification of Contract
Contract of Bailment:
According to section 148 of Contract Act, a baillment is
the delivery of goods by one person to another for
some purposes, upon a contract that they shall, when
the purpose is accomplished, be returned or
otherwise disposed of according to the directions of
the person delivering them.
For example:
A for repair his watch, gives it to B. B, after repair the
watch, is bound to return it to A or to the person as A
nominates. Here the contract Between A and B is
contract of bailment.
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Illegal contract:
The contract which is opposed to existing law is called
illegal contract. The law does not admit the existence
if illegal contract. And the contract is also deemed to
be void.
For example:
A and B made a contract for smuggling which is illegal.
 Classification of Contract
Contract of Uberrimae fidei:
The contract which is based on good faith and the
contracting parties are bound to disclose all the
material facts. And later if any fact or information of
the contract is proved to be false, then the contract is
voidable, and it is called contract of Uberrimae fidei.
Contract of Insurance is this type of contract.
 Classification of Contract
Contract of Agency:
According to section 182 of the Contract Act, an agent is a
person employed to do any act for another or to
represent another in dealing with third persons. The
contractual relation between the owner and agent is
called agency.
Oral contract:
In section 10 of the Contract Act 1872, it is said that the
agreement which has not been affected by any law and
if they are made by the free content of parties
competent to contract for lawful consideration and with
a lawful objective and enforceable by law of contract.
 Classification of Contract
So, oral contract is not prohibited by law of contract.
Actually many a contract is made verbally. Moveable
property is transferred on the basis of verbal contract.
There is provision of oral contract in section 9 of the
Transfer of Property Act 1882. according to this
section, where there is no written provisions of
transfer specifically, transfer of property may be oral.
Option:
if the offeree after proposal by the offeror takes some
times to consider the proposal for consideration, then
this contract is called option.