CLASSIFICATION OF CONTRACT

Enforceabilty Formation Performance

Valid contract Express Contract Executed Contract

Voidable contract Implied Contract Executory Contract

Void Agreement Quasi Contract Unilateral Contract

Illegal Agreement Bilateral Contract

Unenforceable
agreement
• Valid Contract:
• A valid contract is enforceable by law, An agreement
becomes enforceable by law when all the essentials of
a valid contract are present.
• Obligations of Parties:
• In a valid contract, all parties are legally responsible for
the performance of the contract, if one of the parties
breaches the contract, the other party can enforce it
through court of law.
• Example: If “A” agrees to sell a car to “B”, if it fulfills all
the essentials of a contract, it is a valid contract, If “A”
fails to deliver the car, “B” can sue him and if “B” fails to
• Voidable Contract:
• It is voidable contract when the consent of one of
the parties is not free, contract which has been
made on by using false means, through fraud and
mispresentation.
• Example:“D” forced “Q” to sell his car at gunpoint.
• “A” deceives “B” by stating that his factory produces
10 million kg of sugar monthly and induces “B” to buy
it. The contract is voidable
• Void Contract:
• The term void means not binding by the
law. A contract which is not enforceable
by law is a void contract.

• Obligations of Parties:
• A contract becomes void due to impossibility to
performance. A contract becomes void before
performance when it becomes impossible to be
performed by any party due to following reasons.
• Void Agreement:
• An agreement not enforceable by law is said to be
void. The void agreement does not creates any legal
obligations on among parties. An agreement which is
void from the beginning is void agreement.
• Example: “A” promise to buy a cow from “B” for
25000Rs/= .The cow was dead before the contract.
Both parties were unaware. The agreement is void.
• Unenforceable contract:
• An unenforceable contract is that
contract which cannot be enforced in a
court of law because of some technical
defects and faults such as absence of
writing, registration, requisite stamp etc.
• Example: “A” borrow Rs. 1 billion from “B”
and makes a pronote on a Rs.10 stamp
paper, it is unenforceable because
pronote is undervalued.
• illegal Agreement:
• An agreement is illegal when its performance is
forbidden by any law. Such an agreement can never
become a contract. An agreement is illegal and void if
it is forbidden by law.

• Example: “A” gives “B” money to buy smuggling

goods, The agreement is illegal and the money
cannot be recovered.
• 2: According to Formation:
• According to Formation a contract has the following
three kinds.

 Express Contract.
 Implied Contract.
 Quasi Contract
• Express Contract :
• Express contract is one which is expressed in words
spoken or written. When such a contract is formed,
there is no difficulty in understanding the rights,
terms, obligations and conditions of a contract.

• Example: “A” gives his house on rent to “B”, on per

month 10000 Rs and for one year of period, “A”
mentioned terms and condition on a paper.
• Implied Contract: An implied contract is made
without any words spoken and written, It arise from
acts, conduct of parties, course of dealing or
circumstances.

• Example: “A” went into a restaurant and had a cup of

tea. It is implied contract that A will pay for the cup of
tea
• Quasi Contract:
• In a quasi contract, the law imposes certain
obligations under some special circumstances.
• It is based upon the principle of equity that a
person shall not get allowed to get benefit at the cost
of another.
• Example: “A” finds lost goods of “B” . “A” is bound
legally to return goods back to “B”.
•According to Performance:
•According to performance a
contract is of following two
kinds.
•Executed Contract
•Executory contract
• Executed Contract :
• A contract is said to be executed when
both the parties have completely
performed their obligations. It means
that nothing remains to be done by either
party under the contract.
• Example:
• “A” buys a book from “B” . “A” delivers the
books “B” pays the price. It is an executed
contract.
• Executory Contract :
• In an executory contract something remains to be
done. In other words, a contract is said to be
executory when both parties to a contract have yet to
perform their obligations.
• Example:
• “M” sells his car to “N” for 1 million, “N” has not yet
paid and “M” has not delivered the car.
• According to Parties:

• According to parties a contract may be of the

following two kinds.

• Unilateral Contract
• Bilateral Contract
• Unilateral Contract: In a unilateral contract only one
party has commitment. In other words, it is a
contract where only one party is bound but the
other party chooses to be bound by it.

• Example:
• A promises to pay Rs 10,000 to any one who finds his
lost beg, B finds the bag and returns to A, it is a
unilateral contract which comes
• Bilateral Contract: It is a contract where
both parties are bounded to perform
certain duties, responsibilities and
obligations.

• Example: A promises to supply raw

material and B promises to pay the price
of raw materials to B.