class 6 types of contracts (1)
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The ContractAct
1872Types of Contracts
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Learning Objectives
Contracts can be classified into different
types based on 3 different criterions :
Validity
Formation
Performance
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Classification:
Based pon
!alidity
Classification of Contracts
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!oidabl
e
Contract
!oid
Agree"ent
!oid Contract#llegal
Agree"ents
$nenforceable
Contract
Classifications Based on Validity
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!oidabl
e
Contract
!oid
!oid Contract#llegal
Agree"ents
$nenforceableContract Agree"ent
X threatens to kill Y if he
does not sell his house to X
for TK!"##"###
Y a$rees to sell the house
%ince Y&s consent has beenobtained by coercion" thecontract is 'oidable at
theoption of Y
!oidable Contract
(n a$reement )hich is
enforceable
the option
more of
by la) at
of one or
the partiesthereto" but
option of
not at the
or
others" is
the other
a *voidable
contract%& '(ec& 2)i*+
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!oid Agree"ent
• (n a$reement
notenforceable by la)
is said
to be void&• ( 'oida$reementdoes
not le$al
create
any ri$ht
or obli$ation
+ %uch a$reement isvoid-ab-initio
from the be$innin$
itself
!oidable
Contract
!oid
Agree"ent
!oid Contract#llegal
Agree"ents
$nenforceable
Contract
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!oid Contract
• ( contract
ceases
enforceable
)hich
to be
by
la)becomes void )hen it
so ceases to beenforceable %ec ,-./
• 0n this case )hen the
contract )as entered
into" it may be 'alid andbindin$ onas per
the partiesla)"
but itsubse1uently
becomes 'oid
!oidAgree"ent
!oid Contract#llegalAgree"ents
$nenforceableContract
2$: in the case!oiodaf bliemport
contract" thea$reement is Conetnr af cot
rceable"
but
if
then it
subse1uently )ar brakes
out becomes 'oid contract
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#llegal Agree"ents
• (n
illegal
agree"ent is
one" )hich is a$ainst
some basic rule of public
policy or is of criminal innature or is immoral
• (n ille$al a$reement is
not only 'oid bet)een the
immediate parties but hasits further effect that e'en
the collateral transactions
to it become tinted )ith
ille$ality
!oidAgree"ent
!oid Contract#llegal
Agree"ents
$nenforceableContract
r 4a.a borro)s TK5"### from r 4afi forthe purpose of importin$ prohibited $oodsr 4afi kno)s of the purposes ofa$reement The transaction bet)een r4afi and r 4a.a is collateral to thea$reement of importin$ 0t is ille$al since the
main a$reement is ille$al
Contract
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6nenforceable Contract
• (n
nenforceablecontract is one )hich
cannot be enforced in a
court of la) because of
some technical defectsuch as under7stamped
or absence of contract
in )ritin$• %uch
becomesonce the
contracts
enforceable
technicaldefect is remo'ed
!oidable
Contract
!oid
Agree"ent
!oid Contract#llegal
Agree"ents
$nenforceable
Contract
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Classification:
Based pon
,or"ation
Classification of Contracts
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Classifications based on Formation
28press
Contract
0mpliedontractC
9uasiContract
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28press Contract
• ( contract is called as
-.press Contract if
the terms of the
contract are e8presslya$reed upon
-)hether by )ords
spoken or )ritten/ at
the time of formationof contract
28press
Contract
0mplied
ontractC9uasi
Contract
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#"plied Contract
• 0n this case the
contract comes
into e8istence bythe acts or
conducts of the
parties
72$" ettin$
into a Public bus
28press
Contract
0mplied
ontractC9uasi
Contract
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9uasi Contract
A /asi
contract is
one0 hichis
created by la 0t is an obli$ation
)hich la) creates
in absence of ana$reement
28ample ;Trader lea'es the $oods at r (
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Based
pon
erfor"ance
Classification of Contracts
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Classifications: Performance
Based on
Performance
28ecutory
Contract
6nilateral Bilateral
28ecuted
Contract
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-.ectory Contract
( contract in
)hich both the
partiesor any one party to the
contract has to
still perform their
shareof obli$ation
r ( entered into a contract )ith
the porter for liftin$ his 5 ba$sPorter a$reed to lift all the 5 ba$sfor TK !## (T present it is ane8ecutory contract since the porter has not lifted the ba$s and r (has not paid him
Based on
Performance
28ecutory
Contract
6nilateral
28ecutoryContract
Bilateral
28ecutoryContract
28ecuted
Contract
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-.ectory Contract
6nilateral
28ecutory Contract =here any one party to the
contract has to still perform
its share of obli$ation
Bilateral
28ecutory Contract =here both the
parties tothe contract has to still
perform their share of
obli$ation
Based on
Performance
28ecutory
Contract
6nilateral
28ecutoryContract
Bilateral28ecutoryContract
28ecuted
Contract
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-.ected Contract
; ( contract in )hich
both the
parties to ha'ethe
contractcompletely
performed
their
share of obli$ation
nothin$and
remains
done
by
tobe
either
of the parties
28ecutory
Contract
6nilateral
28ecutoryContract
Bilateral28ecutoryContract
28ecuted
Contract
28ample ;r ( entered into acontract )ith the porter for liftin$ his5 ba$s Porter a$reed and lifts allthe 5 ba$s for TK !## >ere theporter has lifted the ba$s and r (has paid him
Based onPerformance
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(""ary
Based on
Validity
• Voidable Contract
• Void ($reement
• Void Contract
• 0lle$al ($reements
• 6nenforceable
Contract
Based on
Formation• 28press Contract• 0mplied Contract
• 9uasi Contract
Based on
Performance
• 28ecutory Contract
• 28ecuted Contract
Contracts "ay be classified :