Contracts
- By Mominur Rahman
- Published 16 October 2006
- Law
- Unrated
KINDS OF CONTRACT
Contracts may be classified in terms of their form, or in terms of their enforceability, or the way they are created.
Formal and simple contracts:
Contracts are classified in terms of their form as (1) contracts under seal (2) contracts of records, and (3) simple or parol contracts.
The first two classes are known as formal contracts, their validity or legal force being based upon form alone. An obligation imposed by the judgement of a court and entered upon its records is often called a contract of record.All contracts other than contracts of record and contracts under seal are called simple or parol contracts, whether oral or in writing, must be supported by consideration.
A formal contract specially of English law, and is enforceable, if it satisfies four conditions, namely,
(1) The contract must be in writing.
(2) It must be registered according to the law of registration of document.
(3) It must be between parties standing in near relation to each other.
(4) It should be proceed out of natural love and affection between the parties.
Express and implied contracts
Simple contracts may be classified in terms of the way in which they are created as (1) express contracts and (2) implied contracts.
Express contracts: Express contracts is one in which the parties have made an oral or written declaration of their intentions and of the terms of the condition. In other words, an express contract is one, the terms of which are stated in words, spoken or written.
Implied contract: Implied contract is one in which the evidence of the agreement is not shown by words, written or spoken, but by acts and conduct of the parties An implied contract can not arise when there is an existing express contract on the same object
Under certain conditions the law creates and enforces legal rights and obligations when no real contract, express or implied exists. These obligations are known as quasi contracts. A quasi or constructive contracts rests upon the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another. In truth however it is not a contract at all. Duty and a promise or agreement or intention of the person sought to be charged, defines it.
Valid Contract:
A valid contract is an agreement which is binding and enforceable. It has all the essential elements to be stated and discussed later.
Voidable Contract:
A voidable contract is an agreement that is binding and enforceable but, because of the lack of one or more of the essentials of valid contract, it may be repudiated by the aggrieved party at his option. If the party having the right to avoid his obligation does not exercise the right within a reasonable time, the agreement is binding and enforceable.
A Void Contract:
A void contract is not really a contract at all. The term means an agreement which is without any legal effect. Thus an agreement by a minor is void under the Indian law.
An Unenforceable Contract:
An unenforceable contract is one which, though perfecyly valid iv all other respects, lacks some technical requrement needed ti make it enforceable,e.g,some necessary evidence. Such a contract will not be enforced by the court unless until the defect is rectified. Thus contracts for the sale of land or any interest therein must be evidence in writing, signed by the defendant, before they can be the subject of a successful action at law.
But such enforceable contracts are not void, and therefore if they have been performed and property has been transferred to the court will not intervene to set the agreement aside. Thus, if A really agrees to buy B’s house and payes a deposit to B, then latter changes his mind and refuses to sign a written contract to purchase the house, B will be unable to sue A for damages or performance of the contract but will be able to keep A’s deposit, and the court will not assist A to recover it.
Executed and Executory Contract:
Contracts can be classified in terms of the extent to which they have been perform or carried out as (1) Executed contracts and (2) Executory contracts.
Executed contract is one that has been completely performed. A contract may be executed at once, (i.e, at the time the contract is made), as in the case of a cash sale, or it may be become executed in the future bt it’s terms being carried out in due time.
An executory contract is composed of undertakings in which one or both parties under an obligation to do or not to do certain things. In other words, under the terms of the contract something remains to be done. For example, if an electric supply 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 contract is still deemed executory on the other.
Bilateral and Unilateral Contract :
An agreement may originated in one of the several ways. First, there may be an offer of a promise and a simple assent. This is possible only when the promise is under seal or of record. This way or mode of making contract is applicable in English law and not in Indian law. Second way in which there may be an offer of an act for a promise, as when a public omnibus by running on it’s route makes an offer of it’s services for the promise of the one entering to pay his face. Third there may be an offer of a promise for an act, as one promises to pay a specified sum for the performance of an act, such as the returning of lost goods. Fourth, an agreement may originated in an offer of promise for a promise, as when one person offers to pay Rs.100 in return for the promise of another to paint his car. The first three methods result in Unilateral contracts, because in each instance there is an obligation to perform on the part of only one party. The fourth or last method creates a Bilateral contract, in that there is an obligation on the part of both to do or to refrain from doing a particular thing. In the case of a unilateral or one sided contract, one party to the contract has performed his part even at the time of it’s formation and an obligation is outstanding only against the other. In the bilateral or two-sided contract, at the time of it’s formation there are two outstanding obligations, one on either party to the contract, e.g., A promises to paint a picture in one month in return for which B promises to pay Rs.100. Here, there are two promises and each party is a promisor in respect of one promise and a promise in respect of the other, and as such each can hold the other liable for the breach of his promise.
Formal and simple contracts:
Contracts are classified in terms of their form as (1) contracts under seal (2) contracts of records, and (3) simple or parol contracts.
The first two classes are known as formal contracts, their validity or legal force being based upon form alone. An obligation imposed by the judgement of a court and entered upon its records is often called a contract of record.All contracts other than contracts of record and contracts under seal are called simple or parol contracts, whether oral or in writing, must be supported by consideration.
A formal contract specially of English law, and is enforceable, if it satisfies four conditions, namely,
(1) The contract must be in writing.
(2) It must be registered according to the law of registration of document.
(3) It must be between parties standing in near relation to each other.
(4) It should be proceed out of natural love and affection between the parties.
Express and implied contracts
Simple contracts may be classified in terms of the way in which they are created as (1) express contracts and (2) implied contracts.
Express contracts: Express contracts is one in which the parties have made an oral or written declaration of their intentions and of the terms of the condition. In other words, an express contract is one, the terms of which are stated in words, spoken or written.
Implied contract: Implied contract is one in which the evidence of the agreement is not shown by words, written or spoken, but by acts and conduct of the parties An implied contract can not arise when there is an existing express contract on the same object
Under certain conditions the law creates and enforces legal rights and obligations when no real contract, express or implied exists. These obligations are known as quasi contracts. A quasi or constructive contracts rests upon the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another. In truth however it is not a contract at all. Duty and a promise or agreement or intention of the person sought to be charged, defines it.
Valid Contract:
A valid contract is an agreement which is binding and enforceable. It has all the essential elements to be stated and discussed later.
Voidable Contract:
A voidable contract is an agreement that is binding and enforceable but, because of the lack of one or more of the essentials of valid contract, it may be repudiated by the aggrieved party at his option. If the party having the right to avoid his obligation does not exercise the right within a reasonable time, the agreement is binding and enforceable.
A Void Contract:
A void contract is not really a contract at all. The term means an agreement which is without any legal effect. Thus an agreement by a minor is void under the Indian law.
An Unenforceable Contract:
An unenforceable contract is one which, though perfecyly valid iv all other respects, lacks some technical requrement needed ti make it enforceable,e.g,some necessary evidence. Such a contract will not be enforced by the court unless until the defect is rectified. Thus contracts for the sale of land or any interest therein must be evidence in writing, signed by the defendant, before they can be the subject of a successful action at law.
But such enforceable contracts are not void, and therefore if they have been performed and property has been transferred to the court will not intervene to set the agreement aside. Thus, if A really agrees to buy B’s house and payes a deposit to B, then latter changes his mind and refuses to sign a written contract to purchase the house, B will be unable to sue A for damages or performance of the contract but will be able to keep A’s deposit, and the court will not assist A to recover it.
Executed and Executory Contract:
Contracts can be classified in terms of the extent to which they have been perform or carried out as (1) Executed contracts and (2) Executory contracts.
Executed contract is one that has been completely performed. A contract may be executed at once, (i.e, at the time the contract is made), as in the case of a cash sale, or it may be become executed in the future bt it’s terms being carried out in due time.
An executory contract is composed of undertakings in which one or both parties under an obligation to do or not to do certain things. In other words, under the terms of the contract something remains to be done. For example, if an electric supply 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 contract is still deemed executory on the other.
Bilateral and Unilateral Contract :
An agreement may originated in one of the several ways. First, there may be an offer of a promise and a simple assent. This is possible only when the promise is under seal or of record. This way or mode of making contract is applicable in English law and not in Indian law. Second way in which there may be an offer of an act for a promise, as when a public omnibus by running on it’s route makes an offer of it’s services for the promise of the one entering to pay his face. Third there may be an offer of a promise for an act, as one promises to pay a specified sum for the performance of an act, such as the returning of lost goods. Fourth, an agreement may originated in an offer of promise for a promise, as when one person offers to pay Rs.100 in return for the promise of another to paint his car. The first three methods result in Unilateral contracts, because in each instance there is an obligation to perform on the part of only one party. The fourth or last method creates a Bilateral contract, in that there is an obligation on the part of both to do or to refrain from doing a particular thing. In the case of a unilateral or one sided contract, one party to the contract has performed his part even at the time of it’s formation and an obligation is outstanding only against the other. In the bilateral or two-sided contract, at the time of it’s formation there are two outstanding obligations, one on either party to the contract, e.g., A promises to paint a picture in one month in return for which B promises to pay Rs.100. Here, there are two promises and each party is a promisor in respect of one promise and a promise in respect of the other, and as such each can hold the other liable for the breach of his promise.
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Article Series
This article is part 1 of a 2 part series. Other articles in this series are shown below:
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Contracts