Agreement between two or more members is known as a
Main Classes of Contract
A valid contract is one which is enforceable by law. the object of such a bond is to create an outstanding obligation between the parties, one party shall be bound to some performance, the other shall have a legal right to enforce.
An agreement which is not enforceable by law is void. Such an agreement creates no legal right and obligations on either side, e.g. an agreement with an alien enemy, an agreement by way of wages, an agreement in restraint of trade. It is, in fact, a mere nullity. It may be treated as of no legal effect because it is contrary to some law or opposed to public policy.
A voidable contract is “an agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others”. e.g. a contract induced by fraud or misrepresentation or coercion, in other words, this type is, where an aggrieved party, thereto may avoid or repudiate while the other party cannot do so.
The court, under certain circumstances, will not enforce a contract which is otherwise valid because of the technical difficulty created by the law of procedure generally, Such contracts are also called unenforceable which are incapable of proof owing to the neglect of some formalities required by special provisions of law. The most important contracts in this class are of guarantee and for the sale or other disposition of land of any interest in land.
The term “illegal” is used generally the wider sense. These types of contract are considered contrary to law and prohibited by law on pain of penalty where a void contract does not. All illegal contracts are void, but all void contracts are not illegal such as wagering agreement is void but not illegal
Contract on the Basis of their Performance
An executed contract is one that has been fully performed by all parties. It is obvious, of course, that a contract may at a give time be at one of the various stages of execution
A contract may be executed at once, as in the case of cash sale; or it may be executed or performed in the future.
An executory contract is one upon which no performance has taken place. For example, if a utility company agrees to furnish electricity to another party for a specified period of time at a stipulated price, the contract is executory. If the entire price is paid in advance, the commitment is still deemed executory, although, strictly speaking, it is executed on one side an executory on the other.
Contract on the Basis of Creation
An express contract is the result of the written or spoken words of the parties; these words establish the contractual relationship. The agreement and its terms are declared by the parties and are not left to interference or to be understood.
An implied contract is one in which the evidence of the agreement is not shown by words, written or spoken, but by the acts and conduct of the parties. Such an agreement arises, for example, when one person, without being requested to do so, renders services under circumstances indicating that he expects to be paid for them, and the other person, knowing such circumstances accepts the benefit of those services.
Under certain circumstances the law imposes an obligation to pay for a benefit received as through a contract had actually been made. This will be done in a limited number of situations in order to attain an equitable or just result.
when a homeowner permits repairs to be made on his home with the knowledge that they are being made by a stranger who would expect to be paid for such repairs, there is quasi-contractual duty to pay for the reasonable value of the improvements.
In order to distinguish this type of obligation from a true contract which is based upon the agreement of the parties, the obligation is called a Quasi.
Contracts on the Basis of Nature
A bilateral contracts is created by an exchange of promises
X promises to marry Y, and Y promises to marry X, this is a bilateral agreement.
This type of contract is an exchange of a promise for an act. Since only one party is obliged to perform after the contract has been made, this is called unilateral contract.
At Y’s request, X extends Rs. 2 lacs worth of credit to Z, and Y agrees to pay this sum in the even of Z’s default. This is unilateral contract, consisting of X’s act in exchange for Y’s promise for repayment.
Where the performance of contract depends upon the happening of
According to section 31, It is a contract, to do or not to do something, if some event, collateral, to such legal commitments, does or does not happen.
Formal contractors are those which are required to meet established standards of form, such as negotiable instruments; or those executed under seal. Must have essentials to be a valid contract
Most contracts are not required to conform to a set form or pattern. Such is referred to as being informal or simple. It may be written or oral. It must have consideration to support it otherwise it is not enforceable.