CONTRACT AND TYPES
Define Contract as per Indian Contract Act, 1872. Also, explain the types of contracts.
As per Section 2(h) of the Indian Contract Act 1872, an agreement enforceable by law is a Contract.
In simpler terms, a contract is a legally binding arrangement between two or more parties that creates obligations for them to perform specific actions.
For a contract to be valid and legally enforceable, it must fulfill certain essential elements, such as offer, acceptance, consideration, intention to create legal relations, the capacity of the parties, and a lawful object.
Kinds of Contracts- 1. Express Contracts: These contracts are explicitly and clearly stated, either in written or verbal form. Example- X offers Y to sell his car for 1,00,000 and Y agrees to buy and make a written contract then it will be a type of express contract.
2. Implied Contracts: These contracts are not explicitly stated but are inferred from the actions, behaviour, or circumstances of the parties involved. Example- bid at auctions.
3. Quasi Contracts: Legal obligation created by the court to prevent one party from unjustly benefiting at the expense of another party.
4. E-Contracts: An e-contract, also known as an electronic contract or online contract, is a contract that is formed, signed, and executed electronically, typically over the Internet or through electronic communication methods. These contracts have the same legal validity and enforceability as traditional paper-based contracts, provided they meet certain legal requirements.
5. Bilateral Contracts: Both parties exchange promises and create mutual obligations i.e., both parties agree to do something in exchange for something else. Example- A promises to construct a house for B and in return B will pay 5,00,000 to him on completion of the contract.
6. Unilateral Contracts: One party makes a promise or offer that is contingent upon the other party’s performance of a specific action. Example- offering a reward for finding a lost item is a unilateral contract.
7. Executed Contracts: An executed contract is one in which both parties have fulfilled their obligations as per the terms of the contract. Example- A promises to construct a house for B and in return B will pay 5,00,000 to him on completion of the contract. Thus A constructed the house & in return B paid 5,00,000.
8. Executory Contracts: An executory contract is one in which one or both parties have not yet fulfilled their obligations. Example- X promised to deliver rice & Y promised to pay 500rs in return. Neither X delivered the rice nor Y paid the amount.
9. Valid Contracts: Contracts that meet all the legal requirements as per Section 10 of the Indian Contract Act and are enforceable in a court of law.
10. Void Contracts: According to 2(j) of the Indian Contract Act, A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable. These are the contracts that when originally made were valid and binding on parties but eventually become void due to some circumstances.
11. Voidable Contracts- According to sec 2(i) of the Indian contract act 1872, An agreement which is enforceable by law at the option of one or more parties but not at the option of others is a voidable contract. Example- Consent affected by Coercion, Misrepresentation, Undue Influence, Fraud, Mistake.
12. Unenforceable Contracts: These contracts may seem valid, but due to certain legal defects (like a lack of written agreement for a contract that needs to be in writing), they cannot be enforced in court.
