CLASSIFICATION OF

CONTRACTS
M.RANJINI
20E1607
B.COM (A&F) II-A
TYPES OF CONTRACTS
ON THE BASIS OF
VALIDITY/ENFORCEABILITY

TYPES OF CONTRACTS ON THE BASIS OF FORMATION

ON THE BASIS OF
PERFORMANCE
ON THE BASIS OF VALIDITY / ENFORCEABILITY
VALID CONTRACTS

ON THE BASIS OF VALIDITY/

ENFORCEABILITY
VOID CONTRACTS

VOIDABLE
CONTRACTS

ILLEGAL
AGREEMENTS

UNENFORCEABLE
CONTRACTS
VALID CONTRACT
• An Agreement which is binding EXAMPLE :
and enforceable is a valid
X offers to sell his bike for
contract.
Rs.15000 to Y.
• It contains or fulfils all the
Y Agrees to Buy.
essentials of a valid contract.
It is a valid contract.
VOID CONTRACT
EXAMPLE:

• [Sec 2(j) ] “A contract which 1) X agrees to write a book with a

ceases to be enforceable by law publisher. After few days, X dies in
an accident. Here the contract
becomes void when it ceases to be
becomes void due to impossibility of
enforceable”. performance of the contract.
• A Void contact is one, which does 2) A contract with B (owner) for the
not fulfil all or any of the supply of 10 tons of sugar, but before
essentials of the valid contract. the supply is effected, the fire caught
in the factory and everything was
destroyed.
VOIDABLE CONTRACT
• [Sec 2(i)] An agreement, which is Example :
enforceable by law at the option of
X threatens to kill Y if he doesn’t
one or more parties thereto, but not
at the option of the other or others, sell his new car to him for
is a voidable contract. Rs.10,000. Y agrees. The contract is
voidable at the option of Y.
• It is valid or void at the option of
the affected party.
• Agreements caused by coercion,
undue influence , fraud or
misrepresentation are voidable.
ILLEGAL AGREEMENTS
• An illegal agreement is one in Example :
which the object is illegal or
against law. A contract to commit a murder.

• It is not enforceable by law.

• All illegal agreements are void but
all void agreements are not
necessarily illegal.
UNENFORCEABLE CONTRACT
EXAMPLE :
• Unenforceable contract is a
contract not enforceable in the Absence of writing or want of
court of law, because of some stamp in a promissory note are
technical defect. some of the technical defects.
ON THE BASIS OF FORMATION
EXPRESS
CONTRACT

ON THE BASIS OF
FORMATION
IMPLIED
CONTRACT
QUASI
CONTRACT
E.COM
CONTRACTS
EXPRESS CONTRACTS
EXAMPLE :
• The Express contracts is one, in which • A tells B on telephone that he offers to
the terms are expressly written or agreed sell his house for ₹ 2 Lacs and B in reply
between two parties. informs A that he accepts the offer, this is
an express contract.
• [Sec 9 ] When the offer / proposal or
acceptance of any promise is made in
words it is said to be express.
IMPLIED CONTRACTS
[Sec 9] EXAMPLE
• The implied contract is one, which is not X gets into a public bus. There is an
expressly written but understood by the implied contract that he will pay the bus
conduct of parties . fare.
• Where the proposal or acceptance of any
promise is made otherwise than in
words, the promise is said to be implied.
QUASI CONTRACT
EXAMPLE :
• Actually a quasi contract is not a contract • T, a tradesman, leaves goods at C’s
but it resembles a contract house by mistake. C treats the goods as
his own. C is bound to pay for the goods.
• It is a contract created by law.
• It is based on the principle that “a person
shall not be allowed to enrich himself
unjustly at the expense of the other”.
E-COMMERCE CONTRACTS
• When a contract entered into by two or more parties using
electronics means, such as emails is known as e-commerce
contracts.
• In Electronic commerce , different parties/persons create
networks which are linked to other networks through EDI –
Electronic Data Inter change.
• This helps in doing business transactions using electronic mode.
• These are known as EDI contracts or Cyber contracts or mouse
click contracts.
ON THE BASIS OF PERFORMANCE

ON THE BASIS OF
PERFORMANCE
EXECUTED
CONTRACT UNILATERAL
EXECUTORY CONTRACT
CONTRACTS BILATERAL
CONTRACT
EXECUTED CONTRACT
EXAMPLE
• P sold his scooter to K for Rs. 18,000. K
• An Executed contract is one in which
paid the price. It is executed contract.
both the parties have performed their
obligations.
EXECUTORY CONTRACT
EXAMPLE :
P agrees to take tution for H , a student,
• An Executory contract is one in which ,
from the next month and H in
the obligations are yet to be performed consideration promises to pay P ₹
1000/month. The contact is executory.
either by one or both the parties.
EXECUTORY CONTRACT
UNILATERAL
CONTRACT
BILATERAL
CONTRACT
UNILATERAL CONTRACT
EXAMPLE :
• Here one party has performed his • M advertises payment of ₹4000 to any
obligation and the other party has not one who finds his missing boy and
performed the obligation at the time of brings him.
contract.
• B traced the boy.( B performed his share
• They are also called one- sided contract. of obligation )
• But It remains for M to pay the reward
to B.
BILATERAL CONTRACT
EXAMPLE :
• A promises to sell his plot to B for ₹1 lacs
• A bilateral contract is one in which both cash down, but B pays only ₹25,000 as
the parties have not yet performed the advance and promises to pay the balance
on next Sunday.
obligation at the time of the contract.
• On the other hand A gives the possession
of plot to B and promises to execute a sale
deed on the receipt of the whole amount.
• The contract between the A and B is
executory because both parties have to
perform their obligations