CLASSIFICATION OF CONTRACTS Contracts can be classified on a number of bases.

They are: On the

foundation of creation. On the foundation of execution. On the foundation of enforceability. On the
Foundation of Creation A contract may be: Made in writing or through word of mouth or Inferred
from the conducer of the parties or circumstances of the case. The first category of contract is
termed as 'express contract' and the second as 'implied contract‟. Express Contract: An express
contract is one where the conditions are clearly stated in words, spoken or written. For instance, A
wrote a letter to B stating “I offer to sell my car for Rs. 30,000 to you”; B accepts the offer through
letter sent to A. This is an express contract. Likewise, when A asks a scooter mechanic to repair his
scooter and the mechanic agrees, it is an express contract made orally through spoken words.
Implied Contract: A contract may be created through the conduct or acts of parties (and not through
their words spoken or written). It may result from a continuing course of conduct of the parties. For
instance, where a coolie in uniform carries the luggage of A to be accepted out of railway station
without being asked through A to do so and A allows it, the law implies that A has agreed to pay for
the services of the coolie. This is a case of an implied contract flanked by A and the coolie. Likewise,
when A boards a D.T.C bus, an implied contract comes into being. A is bound to pay the prescribed
fare. 'There is another category of implied contracts recognized through the Contract Act recognized
as quasi-contracts (Sections 68 to 72). Strictly speaking, a quasi-contract cannot be described a
contract. It is regarded as a connection resembling that of a contract. In such a contract the rights
and obligations arise not through an agreement flanked by the parties but through operation of law.
For instance, A, a trader, left sure goods at B‟s home through mistake. B treated the goods as his own
and consumed it. In such a situation, B is bound to pay for the goods even though he has not asked
for the goods. On the Foundation of Execution On the foundation of the extent to which the
contracts have been performed, we may classify them as (i) executed contracts, and (ii) executory
contracts. Executed Contracts: It is a contract where both the parties have fulfilled their respective
obligations under the contract. For instance, A agrees to sell his book to B for Rs. 30. A delivers the
book to B and B pays Rs. 30 to A. It is an executed contract. Executory Contracts: It is a contract
where both the parties to the contract have still to perform their respective obligations. For instance,
A agrees to sell a book to B for Rs. 30. If the book has not been delivered through A and B has not
paid the price. the contract is executory. A contract may sometimes be partly executed and partly
executory. It happens where only one of the parties has performed his obligation. If A has delivered
the book to B but B has not paid the price. the contract is executed as to A and executory as to B. On
the foundation of execution, a contract can also be classified as unilateral or bilateral. A unilateral
contract is one in which only one party has to perform his obligation, the other party had fulfilled his
part of the obligation at the time of the contract itself. For instance, A buys a ticket from the
conductor and is waiting in the queue for the bus. A contract is created as soon as the ticket is
purchased. The other party is now to give a bus wherein he could travel. A bilateral contract is one in
which the obligations on the part of both the parties are outstanding at the time of the formation of
the contract. On the Foundation of Enforceability From the point of view of enforceability a contract
may be: Valid, Void, Voidable, Illegal or Unenforceable. These conditions shall be used quite regularly
in this course. Hence, you necessity form a clear thought in relation to the their respective meanings.
Valid Contract: A contract which satisfies all the circumstances prescribed through law is a valid
contract. If one or more of these elements is/are missing, the contract is either void, voidable, illegal
or unenforceable. Void Contract: Just as to Section 2 (i) A contract which ceases to be enforceable
through law becomes void when it ceases to be enforceable. It is a contract without any legal effects
and is a nullity. You should note that a contract is not void from its inception. It is valid and binding
upon the parties when made, but subsequent to its formation, due to sure reasons, it becomes
unenforceable and so treated as void. A contract may become void due to impossibility of
performance, change of law or some other reasons. For instance, A promised to marry B. Later on, B
dies. This contract becomes void on the death of B. A void contract should be distinguished from void
agreement. Section 2(g) says that an agreement nor enforceable through law is said to be void. In the
case of void agreement no contract comes into subsistence. Such an agreement confers no rights on
any person and makes no obligations. It is void ab-initio i.e., from the very beginning. For instance an
agreement with a minor is void because a minor is incompetent to contract. Now it should be clear
to you that a void agreement is not the similar thing as a void contract. A void agreement never
matures into a contract; it is void from the very beginning. A void contract, on the other hand, was
valid when it was entered into, but subsequently, because of one cause or the other, became void. A
contract cannot be void ab-initio; it is only an agreement which can be void ab-initio. Voidable
Contract: Just as to Section 2(i) of the Contract Act, An agreement which is enforceable through law
at the option of one or more of the parties thereon, but not at the option of the other or others, is a
voidable contract. Therefore, a voidable contract is one which can be set aside or repudiated at the
option of the aggrieved party. Until it is set aside or avoided through the party entitled to do so, it
remnants a valid contract. A contract is usually treated as voidable when the consent of a party has
not been free i.e., it has been obtained either through coercion, undue power, misrepresentation or
fraud. The contract is voidable at the option of the party whose consent has been so caused. For
instance, A threatens to shoot B if he does not sell his new scooter to A for Rs. 5,000, B agrees. Here
the consent of B has been obtained through coercion. Hence, the contract is voidable at the option
of B, the aggrieved party. If, though, B docs not exercise his option to set aside the contract within a
reasonable time and if in the meanwhile a third party acquires a right in relation to the subject
matter for some consideration, the contract cannot be avoided. For instance, A obtains a ring
through fraud. Here, B's consent is not free and so he can cancel this contract. But if, before this
option is exercised through B, A sells the ring to C ‟who acquires ii after paying the price and in good
faith, contract cannot be avoided. You should note that the option to set aside the contract on this
ground is not accessible to the other party. Hence, if the aggrieved party chooses to regain the
contract, it remnants enforceable through law, If though, the aggrieved party avoids the contract, the
other party is also freed from his obligation to perform the contract and if the party avoiding the
contract has received any benefit under the contract, he necessity restore such benefit to the person
from whom it was received (Section 64).