Contract and It’s Types
Law of Contract
Submitted To: Ms. Shumain Malik
Submitted By
• Ahad Younas
• Sammer Hayat
• Noor Nabi
• Zahoor Ahmad
Contents
Contents
• Introduction to contract
• Types of contract
• Valid Contract
• Void Contract
• Voidable contract
• Unenforceable contract
Contract
• The term contract is defined as
“ An agreement enforced by law”
Introduction
• It is also stated that according to Sec(2e),“ Every promise and
every set of promises, forming considerations for each other.”
• Section 2(b) defines promise in these words: "when the
person to whom the proposal is made signifies his assent
thereto, the proposal is said to be accepted. Proposal when
accepted becomes a promise."
• It must create a legal obligation or duty.
Types of contract
1. Valid Contract:
• An agreement enforceable by law is a valid contract.
• Contract that has all essential elements of contract.
• Both the parties to the contract can enforce the
contract.
• If one party breaks the contract other has right to be
enforced through the court.
Valid Contract
• It enables one party to compel another party to
do something or not to do something.
• It also creates the legal obligations between two
parties.
• All the parties are responsible for the
performance of this contract.
2. Void Contract
Definition:
• A contract which ceases to be enforceable by law
becomes void when it ceases to be enforceable.
A valid contract becomes void under the following
circumstances:
Destruction of subject matter
Contract becoming unlawful
Death of parties
Parties becoming unlawful
Features of Void Contract
Not enforced by law.
No legal rights.
No obligations on any party.
An agreement which is against the public policy or
against any law is void.
No compensation is paid to any party.
Void Contract
Rights and duties:
• Parties are not legally responsible to fulfill the
contract.
• If any party has received benefit, it was bound to
return.
• It takes place when the consent of one of the
parties is not free.
Voidable Contract
Definition:
A contract becomes voidable when the consent is
not free.
• For example, A threatens to shoot B if he does not
sell his bike to A. B agrees. This contract is
voidable at the option of B
Features
• A voidable contract is a contract that is initially
considered enforceable by the contracting parties.
• When we refer to the term voidable contract, we
are referring to the possibility for a valid contract
to be voided based on irregularities in its formation
or its scope.
Grounds of voidable contract
• Pressure and coercion
• Undue influence
• Misrepresentation
• Fraud
• Induced mistake
• Lack of legal capacity
• Unconscionable and disproportionate terms
Unenforceable contract
• Where a contract is good in substance but
because of some technical defect cannot be
enforced by law is called unenforceable contract.
• These contracts are neither void nor voidable.
