Classification Of Different Kinds Of Contracts
According to section 2(h) of the Indian contract act, 1872. “An agreement enforceable by law is a contract. Contracts may be classified according to their (a) validity, (b) Formation, and (c) Performance.
Classification according to validity:-
1. A valid contract: A valid contract is an agreement that is binding and enforceable. An agreement becomes a contract when all the essential elements (i.e.., offer and acceptance, intention to create a legal relationship, etc..,) are present, in such a case the contract is said to be valid.
2. A voidable contract: An agreement which is enforceable by law at the option of one (or) more parties thereto, but not at the option of the other (or) others, is a voidable contract. This happens when the essential elements of free consent are missing. When the consent of a party to a contract is said to be not free, if it is caused by Coercion, Undue influence, Misrepresentation (or) fraud, etc..,
3. A void contract: A void contract is really not a contract at all. The term “void” means an agreement that is without any legal effect. In other words “an agreement not enforceable by law is said to be void”.
4. Illegal contracts: Some agreements are illegal in themselves (ex:- contracts of immoral nature, opposed to public policy, etc..,) Thus, All illegal contracts are void but all void contracts are not illegal (ex:- A wagering agreement, though void is not illegal).
5. An unenforceable contract: An unenforceable contract is one that cannot be enforced in a court of law because of some technical defect such as the absence of writing (or) where the remedy has been barred by lapses of time.
Classification according to their formation:-
1. Express contract: An express contract is one, the terms of which are stated in words, spoken (or) written at the time of the formation of the contract.
2. Implied contract: An implied contract is one in which the evidence of the agreement is shown by acts and conduct of the parties, but not by words, written (or) spoken. In other words, where the offer (or) acceptance of any promise is made otherwise than in words, the promise is said to be implied promise (or) implied contract.
3. Quasi-contract: In truth, Quasi-contract is not a contract at all. A quasi-contract is an act that is created by law. It does not have any essential elements of a valid contract. It is not intentionally created by parties but is imposed by law. It is founded upon the ‘principles of natural justice, equity, and fair play.
Classification according to their performance:
1. Executed contract: “Executed” means that which is done. An executed contract is one in which both the parties have performed their respective obligation.
2. Executory contract: “Executory” means that which remains to be carried into effect. An executory contract is one in which the parties have yet to perform their obligations.
3. Unilateral (or) one-sided contract: in this type of contract, one party to a contract has performed his part even at the time of its formation and an obligation is outstanding only against the parties.
4. Bilateral contract (or) Two-sided contract: It is a contract in which the obligations on the part of both the parties to the contract are outstanding at the time of the formation of the contract.