Classification of Contracts

Contracts types may be classified into different categories depending upon their (i) Enforceability, (ii) Mode of Creation and (iii) Extent of Execution.

Contracts types

1. Classification of Contracts on the basis of Enforceability

(a). Valid contracts: Contracts which satisfy all the essential elements of a valid contract as laid down by section 10,are enforceable in a court of law. Such contracts are termed as valid contracts.

(b). Void Contracts: An agreement may be enforceable at the time when it was made but later on,due to certain reasons,it may become void and unenforceable. Such agreements are known as void contracts.

Following are some of such contracts:

  1. A contract becomes void by supervening impossibility or illegality (sec 56).
  2. A voidable contracts becomes void,when the party,who had the option to void it,decides to repudiate the contract.
  3. A contingent contract to do or not do something on the happening of an event becomes void when the event becomes impossible (sec 32).

Void Agreement: According to Sec 2(g)‘an agreement not enforceable by law is said to be void.’Thus,a void agreement is one which is deficient in essentials so as to be destitute of legal effects. Such an agreement is taken to be non-existent and is a nullity in its effects.

2. Contracts types On the basis of Formation

On this base Contracts can be classified into three groups, namely Express, Implied, Quasi Contracts.

Express Contracts: The Contracts where there is expression or conversation are called Express Contracts. For example: A has offered to sell his house and B has given acceptance. It is Express Contract.

Implied Contract: The Contracts where there is no expression are called implied contracts. Sitting in a Bus can be taken as example to implied contract between passenger and owner of the bus.

Quasi Contract: In case of Quasi Contract there will be no offer and acceptance so, Actually there will be no Contractual relations between the partners. Such a Contract which is created by Virtue of law is called Quasi Contract. Sections 68 to 72 of Contract Act read about the situations where court can create Quasi Contract.

  • When necessaries are supplied(Sec. 68)
  • When expenses of one person are paid by another person (Sec. 69).
  • When one party is benefited by the activity of another party (Sec. 70).
  • In case of finder of lost tools (Sec. 71 ).
  • When payment is made by mistake or goods are delivered by mistake (Sec. 72).