INDIAN CONTRACT ACT,1872

LECTURE OUTCOME
• Categorizing and Illustrating the various types of contract
 KINDS OF CONTRACT
1. Point of view of enforceability(validity)

2. Point of view of mode of creation(formation)

3. Point of view of extent of execution(performance)

 KINDS OF CONTRACT
On the basis of On the basis of On the basis of
Enforceability Formation Performance

Valid Express
Executed

Void Executory
Implied

Voidable Unilateral
Quasi

Unenforceable Bilateral
 POINT OF VIEW OF ENFORCEABILITY
(a) Valid Contract:- enforceable by law

(b) Voidable Contract:- enforceable by law at option of one of the parties

Example: A, threatens to shoot B if he does not sell his new Bajaj bike to A for
Rs. 2000, B agrees. The contract has been brought about by coercion and is voidable at
the option of B.

(c) Void Contract:- not binding in law

 POINT OF VIEW OF ENFORCEABILITY
(d) Unenforceable Contract:- is valid in itself but not capable of being enforced in
court of law because of some technical defect such as absence of writing.

(e) Illegal or unlawful Contract:- if either the consideration given for the contract is
illegal or the object of the contract is illegal. For example:
(1) Tom promises to give Jerry five grams of cocaine if Jerry promises to
drive Tom to Manhattan on Saturday. This is an illegal contract because the
consideration given for the contract is illegal.
(2) Tom promises to give Jerry $5,000 if Jerry robs a bank on Saturday. This
is an illegal contract because the object of the contract is illegal.
 POINT OF VIEW OF MODE OF CREATION
(FORMATION)
a) Express Contract:- offer and acceptance both are made in words spoken or
written.
Example: [ A tells B on telephone that he offers to sell his car for Rs.
80000 and B in reply informs A that he accepts the offer]
Example: [Mr. A, a student, called Mr B on the phone and agreed to buy
his text books of last semester for Rs.300]

b) Implied Contract:- offer and acceptance by acts and conduct of the parties
Example: [A, a coolie in uniform takes up luggage of B to be carried out of
railway station without being asked by B, and B allows him to do so, law implies that B
agrees to pay for the services of A]
Example: [If A boards a bus for going to his destination and whether he
takes a seat or not, the law will imply a contract from the very nature of the
 POINT OF VIEW OF MODE OF CREATION
(FORMATION)
c) Constructive or Quasi Contract:- A quasi contact is based on the principle that a
person shall not be allowed to enrich himself at the expense of another. These
contracts are strictly not contracts as there is no intension of parties to enter into a
contract.
Example: [A, came into contract with B, to deliver some product to B but by
mistake he delivers the same product to C, now the contract formed between A and C in
quasi contract]
Example: [ABC ltd., a TV co., delivered a new TV to Mrs. Z that she did not
order. She kept the TV and did not attempt to return it. In this case, a Quasi-contract
may be enforced on her to pay for the TV]
 POINT OF VIEW OF EXTENT OF EXECUTION
(a) Executed Contract:- parties of contract completely performed their share of
obligation.
Example: [J Inc, agreed to buy 10 tons of coal from the Northern Coal Co. The Co.
delivered the coal to J’s steel mill, where it was being burned. At that point, the contract
was executed on the part of Northern and executed on J’s part. After J Inc. paid the
company price for the coal supplied, the contract would be executed on both sides.]

(b) Executory Contract:- obligations are outstanding. They can be Unilateral and
Bilateral.
Example: [T agrees to coach R, a medical student, from first day of next month
and R agrees to pay a consideration of Rs. 3000p.m., the contract is executory because
it is yet to be carried out.]
 POINT OF VIEW OF EXTENT OF EXECUTION

(c) Bilateral Contract :-  is an agreement between two parties in which each
side agrees to fulfill his or her side of the bargain

(d) Unilateral Contract :- is a contract agreement in which an offeror

promises to pay after the occurrence of a specified act.
 MCQ
• Where undue influence has been used to form the contract, the
effect is that the contract is:
a) Void
b) A valid contract that binds both parties
c) Illegal
d) Voidable
 MCQ
• A contract where both the parties have fulfilled their obligations is
called as…..
a) Valid
b) Executed
c) Void
d) Unilateral
 MCQ
• ………….. Contract is made by spoken words
a) Implied
b) Express
c) Void
d) Constructive
 MCQ
• Where the contract is understood by conduct of parties it is……..
Contract
a) Implied
b) Express
c) Void
d) Quasi
 MCQ
• Void agreements signifies:
(a) Agreement illegal in nature
(b) Agreement not enforceable at law
(c) Agreement violating legal procedure
(d) Agreement against public policy