Types of contracts under Indian Contract Act 1872

Types of contracts under Indian Contract Act 1872

The types of contracts under the Indian Contract Act 1872 are mainly, valid contract, void contract, unenforceable contract, voidable contract, illegal/ unlawful contract, express contract, implied contract, and Quasi contract

Valid Contract

A valid contract as per section 2(h) of the act states that an agreement enforceable by the law is a contract. To constitute a valid contract there are certain essentials that should be fulfilled under section 10 of the act. All agreements are contracts if they are made by competent parties who enter into the contract by free consent for a lawful object and are valid. There must a proper and appropriate offer and acceptance to constitute a valid contract. There should be an intention to create a legal relationship among the parties involved. The parties involved must be competent under section 11 of the act. Must fulfill all legal formalities and prescription under section 10 of the act to constitute a valid contract.

Void agreements

Void agreements are the agreements that do not constitute a legal agreement and are hence void under the act. Agreements that do not conform to the prescriptions and essentials to constitute a valid contract under section 10 of the Indian Contract Act are deemed void. Agreements entered into by incompetent parties are void under section 11, Agreements are deemed void if there are mistakes in facts under section 20, where the object or consideration is unlawful in part under section 24, where agreements are made without consideration under section 25. Agreements made in restraint of marriage except a minor under section 26, agreements made in restraint of trade under section 27, agreements made in restraint of legal proceedings under section 28, agreements of which meaning isn’t certain under section 29, agreements by way wager under section 30 , agreements contingent on an impossible event under section 36, agreements to do an impossible act under section 56 are all void.

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In the case of Lowe v. Peers, Mr.peers promised Ms.Catherine Lowe that he would not marry anyone other than Ms.Lowe and promised 1000 pounds to pay Ms.Lowe.  The court, in this case, was of the opinion that the promise was not to marry her, but not to marry anyone else and yet she was under no obligation to marry him and therefore the contract was void as it was purely restrictive and carried no promise to marry on either side. Section 30 states that wagering agreements are void and no suit shall be brought against it. Under section 36 of the Indian Contract Act 1872, agreements contingent on an impossible event is void, for example if A agrees to pay B it the moon changes shape, it’s a void agreement.

Unenforceable contract

Unenforceable contract are contracts which are valid and are good in essence, but due to issues arising out of it like technical issues etc., either of the parties cannot challenge the same as there is an impossibility to perform or execute the contract. If A enters into a contract with B to work on the interiors of a building and the building collapses before B could start the work; both of the parties cannot initiate action due to impossibility of enforcing the contract.

Voidable contracts

Voidable contracts are defined under section 2(i) of the Indian Contract Act 1872. Any agreement that is enforceable by law at the opinion of one or more parties thereto, but not at the opinion of the other is a voidable contract. There is a necessity for the existence of free consent to constitute a valid contract. Consent is not said to be free if there is coercion, misrepresentation, fraud, mistake or undue influence . A void contract is invalid right from its initiation but a voidable contract is valid until and unless there is an objection from the offended party. A voidable contract can be made valid by the party who has the right to rescind it by giving up his right of rescinding it.

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Illegal Contracts

They are contracts that have an unlawful or illegal consideration. Section 23 of the Indian contract act describes some conditions and situations which are considered to be illegal as per the law. There is a difference between void agreements and illegal contracts. Void agreements are invalid right from its initiation and the court will not enforce it , but in the case of Illegal contracts, the consideration or object of the contract will be an unlawful one.

Express Contracts

Expressed contracts are the contracts that are written or communicated directly between the parties. Section 9 of the Indian Contracts act 1872 deals with express contracts. It states the creation of expressed contracts through expressly made promises. The proposal and acceptance of the contract is expressly made and is made by words, by speech, or in a written form. Contracts that are made in such manner are called Express contracts. For instance, if A enters into a contract with B in person to buy his car, it is an express contract .

Implied contract

Implied contracts are contracts where the offer and acceptance in the contract is based on the conduct or behavior of the person. For example, buying tickets for a bus ride creates an implied contract , a contract between a doctor and a patient, eating at a restaurant etc. It is a contract made through the actions of conduct of the parties. Section 9 of the Indian Contracts act 1972, deals with implied contracts.

Quasi-contract

A quasi contract is a contract that creates a binding obligation on the parties involved that is imposed on them by the courts for the purpose of prevention of injustice and unjust enrichment. It is a special form of contract that lacks mutual assent of the parties involved but is imposed on them by the courts to prevent injustice. It is covered under Section 68, Section 69, Section 70, Section 71 and Section 72 of the Indian Contracts act . Some of the Important cases on such contracts are Jai Indra Bahadur Singh v. Dilraj Kaur, Damodar Modaliar v. Secretary of state of India etc.

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Author: Anil George,
Christ University, 2nd year

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