Kinds of contract

From the point of mode of creation

• Express contract: where both the offer and acceptance constituting an
agreement are made in words spoken or written
• Implied contract: where the offer and acceptance are made otherwise
than in words
• Constructive or quasi contracts: such a contract does not arise by
virtue of any agreement between the parties but the law infer or
recognizes a contract under certain special circumstances
• Eg: liability of a person to whom money is paid under mistake to
repay it back
• Executory contract: when either of the parties are still to perform
their share of obligation in toto or there remains something to be
done under the contract on both sides
• These are called bilateral or future contracts
• Eg: A agrees to coach B, a pre-medical student, from first day of next
month and B promises to pay Rs.500 per month
• Standard form contract:
• When a large number of contracts have got to be entered in to by a
person, from a practical point of view and for the sake of
convenience, a standard form for the numerous contracts may be
used
• Eg: an insurance policy, shares or a railway ticket
From the point of extent of execution
• Executed contract: when both the parties to contract have completely
performed their share of obligation and nothing remains to be done,
by either of them
• Eg: when a book seller sells a book on cash payment
• Unilateral contracts: where only one of the parties to a contract has
performed his share of obligation and the other party is still to
perform his share of obligation
• Eg: an advertisement offering a reward to anyone who finds a missing
thing
Offer or proposal
• For creating a contract there should be a valid offer or proposal
• Section 2(a)- When one person signifies to another his willingness to
do or to abstain from doing anything, with a view to obtaining the
assent of that other to such act or abstinence, he is said to make a
proposal
• Section 2(c)- the person making the proposal is called the “promisor”,
and the person accepting the proposal is called the “promisee”
• The process of making a proposal is completed by the act of
communicating it to the other party
• Knowledge of offer is essential for its acceptance
• Case law: Lalman Shukla v. Guari Dutt(1913) 11 All. L.J. 489
• The plaintiff contended that the missing boy had been found by
himself and according to the condition of the defendant, he is entitled
to the declared reward. Here, the plaintiff had found the boy after
the reward was declared by the defendant. The plaintiff was not
aware of the offer proposed by the defendant.
• Thus, there was no possibility for the plaintiff to accept the offer of
the defendant. As there was no acceptance, there was no agreement.
• The Allahabad High court held that:
• The plaintiff had no knowledge of the offer when he discovered the
missing boy or
• There was no communication to the plaintiff about the reward before
he found the missing boy
• A contract without acceptance is void
• Plaintiff was not entitled to the reward
Essentials of offer
• Two parties
• Communication of the proposal to the offeree
• Object of making the proposal with a view to obtain acceptance
• Terms should be clear and certain
• Intention to create legal relationship
• Offer should not include the term non-compliance of which would
amount to acceptance