Classification

Of Contract

Ascharya Shukla

Registration Num -
225012301054
 Contract:-
The contract act determines the
circumstances in which promises made by the
parties to the contract shall be legally binding on
them.

 It also determines the remedies against the breach

of contract.
Contracts are of three different categories, as follows:

 Contracts Based on the Validity – Contracts that are based on

valid legal agreement and is enforceable by law fall in this
category of contracts.
 Contracts Based on Performance – When all the parties
perform their duties based on the agreement, and process of
execution defines it.
 Contracts Based on Formation – When a contract is created,
various aspects of the contract are considered.
Examples of different contracts
Contracts Based on the Validity
Example
Teena agrees to make an artistic painting for Joseph, for adequate consideration. After a few days,
Teena dies in a road accident. As the contract becomes impossible to perform.

Contracts Based on Performance Eg- A agrees to paint a picture for B for Rs.1000/-. When A paints a
picture and B pays Rs.1000/- to B then the contract is said to be executed.

Contracts Based on Formation A landlord presented a preprinted a lease contract of renting out his
house and Mr.B agrees to terms and conditions to the lease and signs the agreement, this is express
written contract
 Contracts Based on the Validity

Contracts are divided into five types :

1. Valid Contract
2. Void Contract
3. Voidable Contract
4. Illegal Contract
5. Unenforceable Contract
 Voidable Contract
 An agreement which is enforceable by law at the
option of one or more of the parties thereto, but
not at the option of other party
 Generally contracts become voidable in case
where consent to the contract is not free
consent.
 Consent is not free consent when it is induced by
coercion, influence or misrepresentation.
Valid Contract

 An agreement becomes contract when it is

enforceable by law.
 It has all essentials of valid agreements
 If any one or more of these essentials is missing
 Contract becomes either void, voidable or
 On the basis of Formation

 Express Contract:
 Terms and conditions to the contract are expressly
agreed at the time of formation.
 Contract may be written or verbal
 A landlord presented a preprinted a lease contract of
renting out his house and Mr.B agrees to terms and
conditions to the lease and signs the agreement, this is
express written contract.
 Implied Contract

 A contract which inferred from the acts or conduct

of the parties
 Implied contract is a contract where the offer and
acceptance to the proposal is made otherwise than
in words
 Eg – Mr.Ankit gets into a bus. Where, passenger
never expressly makes an offer to the conductor for
getting into the bus.
 On the basis of Performance

 Executed Contract:
 An executed contract is one in which both the
parties have performed their respective obligations.
 Eg- A agrees to paint a picture for B for Rs.1000/-.
When A paints a picture and B pays Rs.1000/- to B
then the contract is said to be executed.
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