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Contracts Classification

Classification
Basis

According to
enforceability
a)Valid contract
b)Void Contract
c)Voidable Contract
d)Unenforceable contract
e)Illegal Agreement

Valid contract

A valid contract is enforceable by Law.

It becomes valid when it fulfills all its essentials.

Void contract (lacking any legal or


binding force)
A contract which ceases to be enforceable by law is a void
contract.
This means that a void contract is not void from the beginning.
It was a valid contract, but due to some reason it became void.
Example
A agrees to sell his house to B in 5 days. The house is
burnt on the 3rd day.
Depending upon an event admission in university and
admission fee.

Voidable contract
If a contract is enforceable by law at the option of one
party but not on the other party.
A sells his car to B under undue influence, now B has
the option to void the contract or not.
A painter agrees to paint the house of a person A, the
person A prevents the painter to paint, the contract is
voidable at the option of the painter.

Unenforceable contract
A contract which is not enforceable through the court
due to some technical fault.
A deal required to be written on the 100 rupee stamp
paper, but it was done on 10 rupee stamp paper.

Illegal agreement
An agreement that has been forbidden by law cannot
become a contract.

A gives money to B for the business of smuggled goods


and share profits.

Classification Basis
According to formation
a)Express contract
b)Implied contract
c)Quasi contract

Express and Implied Contracts


Express Contract
A contract in which the terms of the agreement are fully and
explicitly stated orally or in writing.

Implied Contracts
Implied Contract
A contract formed in whole or in part by the conduct (as
opposed to the words) of the parties.
A went to a restaurant and had a cup of tea. It an implied
contract that A has to pay for the cup of tea.

Quasi-Contract
Quasi-Contract (Implied in Law)
A fictional contract imposed on parties by a court in the
interests of fairness and justice, typically to prevent the unjust
enrichment of one party at the expense of the other.

A found gold of B, It is Bs responsibility to return the gold.


B leaves the goods at As house by mistake. A use the goods,
A is bound to give B the payment of goods/Usage.

Classification Basis

According to
performance
a)Executed contract
b)Executory contract

According to parties
a)Unilateral contract
b)Bilateral contract

Status of Contracts
Executory Contracts
Not yet performed by all parties

Executed Contracts
Fully performed by all parties.

Unilateral and Bilateral Contracts


Every contract involves at least two parties
the offeror/ promisor, who makes the offer/promise to
perform, and
the offeree/promisee, to whom the offer/promise is
made.

Unilateral and Bilateral Contracts

Bilateral Contract

a promise is given in exchange for


a promise in return.
For example: X promises to
deliver a car to Y, and Y promises
to pay X an agreed price.

Unilateral and Bilateral Contracts

Unilateral Contract
a promise is exchanged only for the offerees
performance.
For example: A promise to pay 1000 to
anyone who finds his bag.