INDIAN CONTRACT ACT,

1872
BSL 605- KINDS
OF CONTRACT

Dr. Arpit Sidhu

PhD, UGC-NET,
HP-SET,
MBA,Mcom,BCom
 LEARNING OUTCOME
• Categorizing and Illustrating the various
types of contract.
KINDS OF CONTRACT

Illegal Contracts E-Commerce Contracts

 KINDS OF CONTRACT

1. Point of view of enforceability(validity)

2. Point of view of mode of creation(formation)

3. Point of view of extent of execution(performance)

1. Point of view of enforceability

(a)Valid contract:- enforceable by law

(b) Voidable contract:- enforceable by law at option of one of the parties

(A, threatens to shoot B if he does not sell his new Bajaj bike
to A for Rs. 2000, B agrees. The contract has been brought about by
coercion and is voidable at the option of B.)

(c)Void contract:- which ceases to be enforceable by law, not binding in

law
 Poll/Quiz
All void contracts are illegal?
a)Yes
b)No
(d)Unenforceable contract:- is valid in itself but
not capable of being enforced in court of law
because of some technical defect such as
absence of writing.
e) Illegal or unlawful contract:- if either the consideration
given for the contract is illegal or the object of the contract
is illegal. For example:

(1) Tom promises to give Jerry five grams of cocaine if

Jerry promises to drive Tom to Manhattan on Saturday. This is
an illegal contract because the consideration given for the
contract is illegal.
(2) Tom promises to give Jerry $5,000 if Jerry robs a
bank on Saturday. This is an illegal contract because the object
of the contract is illegal.
2. Point of view of mode of creation (formation)

a) Express contract:- offer and acceptance both are made in words

spoken or written.
[ A tells B on telephone that he offers to sell his car for Rs.
80000 and B in reply informs A that he accepts the offer]
[Mr. A, a student, called Mr B on the phone and agrred to buy
his text books of last semester for Rs.300]
 Cont..

b) Implied contract:- offer and acceptance by acts and conduct of the

parties.
[A, a coolie in uniform takes up luggage of B to be carried out
of railway station without being asked by B, and B allows him to do
so, law implies that B agrees to pay for the services of A]

[If A boards a bus for going to his destination and whether he

takes a seat or not, the law will imply a contract from the very
nature of the circumstances, and A have to pay the fare]
c)Constructive or quasi contract:- A quasi contact is
based on the principle that a person shall not be
allowed to enrich himself at the expense of another.
These contracts are strictly not contracts as there is
no intension of parties to enter into a contract.
 Cont..
• [A, came into contract with B, to deliver some product
to B but by mistake he delivers the same product to C,
now the contract formed between A and C in quasi
contract]
• ABC ltd., a TV co., delivered a new TV to Mrs. Z that
she did not order. She kept the TV and did not attempt to
return it. In this case, a Quasi-contract may be enforced
on her to pay for the TV
D) E-Commerce contracts
A contract modelled, specified, executed and deployed by a
software system.
Very similar to traditional contracts
Formation of E-Commerce contracts
• Click-Wrap
• Browse-Wrap
• Shink-Wrap
3. Point of view of extent of execution

a. Executed contract:- parties of contract completely performed their

share of obligation.

[J Inc, agreed to buy 10 tons of coal from the Northern Coal Co.
The Co. delivered the coal to J’s steel mill, where it was being
burned. At that point, the contract was executed on the part of
Northern and executed on J’s part. After J Inc. paid the company
price for the coal supplied, the contract would be executed on both
sides.]
 Cont..
b. Executory contract:- obligations are outstanding.
They can be Unilateral and Bilateral.
[ T agrees to coach R, a medical student,
from first day of next month and R agrees to pay a
consideration of Rs. 3000p.m., the contract is
executory because it is yet to be carried out.]
 Quiz/Poll
In an executed contract, both parties have yet to fulfil their
obligations.
a)Yes
b)No
 Comment……

“ All the contracts are

agreements
but
all the agreements are not
necessarily contracts.”
 MCQ
• Where undue influence has been used to form the contract, the
effect is that the contract is:
a) Void
b) A valid contract that binds both parties
c) Illegal
d) Voidable
 MCQ
• A contract where both the parties have fulfilled their obligations is
called as…..
a) Valid
b) Executed
c) Void
d) Unilateral
 MCQ
• ………….. Contract is made by spoken words
a) Implied
b) Express
c) Void
d) Special
 MCQ
• Where the contract is understood by conduct of parties it is……..
Contract
a) Implied
b) Express
c) Void
d) Special
 MCQ
• Void agreements signifies:
1. Agreement illegal in nature
2. Agreement not enforceable at law
3. Agreement violating legal procedure
4. Agreement against public policy