Types of Contracts
1. On the basis of Formation
• Express contract- When the offer or acceptance is made in words spoken or written, it is
an express contract.
• Implied Contract- When the offer or acceptance is made otherwise than in words i.e. by
acts and conduct of the parties, it is an implied contract.
• Quasi Contract- In this type of contract there is no offer and acceptance and hence no
contractual relations between parties. It is created by virtue of law.
2. On the basis of Enforceability/Validity
• Valid Contract - A valid contract is one which has all the essential elements of a
contract as mentioned in Section 10 and is enforceable in a court of law.
• Void Contract – A contract which ceases to be enforceable by law becomes void i.e. if it
lacks any or more of the essential elements (except free consent and legal formalities).
• Voidable Contract – An agreement which is enforceable by law at the option of one or
more of the parties thereto, but not at the option of the other or others, is a voidable
contract. Usually a contract becomes voidable, when the consent of one of the parties to
the contract is obtained by coercion, undue influence, misrepresentation or fraud.
• Illegal Contract – If the contract has been made with an unlawful object, it is called
Illegal Contract. Such contracts are void.
• Unenforceable Contract –This kind of contract is valid by itself, but is incapable of
being enforced in a court of law because of some technical defect such as absence of
writing, registration, requisite stamp etc.
3. On the basis of Performance/Execution
• Executed Contract - A contract is said to be executed when both the parties to a contract
have completely performed their share of obligation.
• Executory Contract - Where contractual obligations are not to be performed now but in
future, it is called executory contract.
4. On the basis of Nature of Consideration
• Bilateral Contracts - In this contract, obligations on the part of both the parties to the
contract are outstanding at the time of the formation of the contract.
• Unilateral Contract - Under this contract, one of the parties has performed his share of
obligation and the other party is still to perform his share of obligation at the time of
formation of the contract.
Difference between Void & Voidable Contracts
Void Contracts Voidable Contracts
1. A contract which ceases to be 1. An agreement which is
enforceable by law becomes void. enforceable at the option of the
aggrieved party.
2. A void contract is valid when it is 2. A contract becomes voidable
made but subsequently becomes when the consent of one of the
unenforceable on certain grounds. parties to the contract is obtained
by coercion, undue influence,
misrepresentation or fraud.
3. A void contract does not provide 3. The aggrieved party in a voidable
any legal remedy for the parties to contract gets a right to rescind
the contract. They cannot get it (cancel) the contract which then
performed even when they so becomes void.
desire.
