Types of Contract

From the point of view of Enforceability

1. Valid Contract: Valid contract has all the essential elements and is enforceable
by law. (refer to lecture 3)
2. Void Contract: Section 2(j) defines a void contract as “A contract which ceases
to be enforceable by law becomes void when it ceases to be enforceable.” A void
contract was enforceable at the time of its inception but loses the binding quality
on the parties subsequent to its formation and becomes invalid and destitute of
legal effect because of certain reasons.
The situations that prevent the contract are not within the capacity of parties. The
situations can be manmade or god/nature-made and are referred to as the Force
Majeure situation.
Ex.: Like being unable to complete a delivery due to road blockage/rotten
goods/earthquake.
3. Voidable Contract: Section 2(i) states “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, is a voidable contract”. The question could be regarding the
ambiguity of any of the essentials of the contract or of whether the pertaining
parties were of sound mind during the offer, acceptance, consideration, or
performance of the contract.
Voidable contracts are contracts with a question. And remain so till the court
passes judgment for or against the question. If the judgment is for the question
the contract becomes valid and if not then it is a void contract.
According to Section 55, when a party to the contract promises to do a certain
thing within a specified time but fails to do so, the contract becomes voidable at
the option of the promisee, if the intention of the parties was that time should be
of the essence of the contract.
Ex.: A has an expensive car that B likes. So, B sends goons to threaten A to sell
the car and A sells the car under gunpoint; it’s coercion and breaches the
essential of free consent so is voidable at the option of A. (“Option of” means that
A can sue B if he wants, it’s his option).

From the point of view of Mode of Creation

1. Expressed Contract: Where both the offer and acceptance consisting of an
agreement enforceable by law are made in words spoken or written, it is an
expressed contract.
 2. Implied Contract: Similar to an implied agreement, an implied contract is where
both offer and acceptance enforceable by law are made otherwise than word
either by act or conduct of the parties. Railway porter example
3. Constructive or Quasi-Contract: It is a misnomer as it doesn’t fall under the
specifications of a contract. A contract is preplanned where after deliberation of
offer, acceptance, and consideration it is lawful. However, a quasi-contract is a
situational contract that is made after the actions are fulfilled and thus is known
as a constructive contract. Sections 71 and 72 discuss the legalities and
boundaries of quasi-contract.
Ex.: Before going on vacation my neighbor asked me to look after his place. The
house then catches fire in the interim and I pay for extinguishing the fire, this was
not a legal obligation rather a social one. But I can ask for monetary
refurbishment upon the return of neighbors and they will be legally bound to pay
me. In this situation, there’s no offer or acceptance of the contract rather the
consideration happens after the phenomenon had occurred.
Similarly helping someone who had an accident on the road or looking for the
rightful owner of lost property(bag or such) falls under the quasi-contract
category.

From the point of view of the Extent of Execution

1. Executed Contract: A contract is said to be executed when both parties have no
obligation to be fulfilled, their shares of obligations already having being fulfilled.
Ex.: Buying stationery from the shop, cash payment is done for the goods at the
moment of purchase.
When only one party has fulfilled their share of obligation the contract is still
called executed. However, as only one party has fulfilled the obligation this
situation can also be named a unilateral contract.
Ex.: A promises a reward for his missing son. B knowing of the reward locates
his son. The moment B locates A’s son B’s part of obligation is fulfilled and this is
a unilateral contract as well as an executed contract.
2. Executory Contract: When there’s a gap between offer, acceptance, and
performance of a contract. In an executory contract, both obligations are
outstanding, one on either party of the contract either wholly or in part at the
moment of the formation of the contract. The contract specifies a certain time
after the formation for the terms of the contract to be fulfilled. As in this case both
the parties’ obligations are outstanding, it is known as a bilateral contract.
Ex.: B orders a company to deliver supplies at a later date; A job offer to join the
company on a certain date made a month prior to the actual date.
From the point of view of Performance
1. Immaterial Contract: If the contract is immaterial in nature as it calls for specific
skills of the promisor himself then it is an immaterial contract. It is also called a
personal contract as it is made with a specific person. Ex.: Making a contract with
Runa Laila for her to sing in a show is an immaterial contract as I will be paying
her for her specific skills, and the contract cannot be fulfilled by anyone but she;
and the agreement is made with her, so, it is a personal contract.
2. Material Contract: The contract does not require any specific skillset and is
rather material in nature, construction, supply, or money and can be fulfilled by
the promisor himself, or his agent, legal representatives, a third party, or his heir.

Performance of Contracts
Who can demand performance?
It is only the promisee who can demand performance unless otherwise stated in the
contract.

Who performs the contract first?

Generally, it is the promisor who performs his obligations first unless stated otherwise in
the contract.
1. By the promisor himself: If the contract is specific or skill-based as in an
immaterial contract, then the promisor himself is to perform the obligations.
2. By the promisor or his agent: If the contract is material in nature like paying
someone then the agent can do it on behalf of the promisor.
3. By the legal representatives: If the promisor dies before fulfillment of the
contract the liability falls on legal representatives.
4. By a third party: Again a contract of material nature can be fulfilled by a third
party in the absence of or on behalf of the promisor himself.