Contact and Classification Of Contract (2024)

In our day-to-day life, we came across many kinds of proposals, Promises, and Considerations directly and indirectly the same way we entered into many contracts verbally and non-verbally and we are not aware of it. Well, it is important to know the basic details of a Contract in the profession of Law, CA, CS, and a person who has a Career Background related toCorporate like an MBA, HR, CEO, Manager, etc. Now the questions blink in your mind are What is The actual meaning of a Contract? Are these contracts legally binding? are these Contracts legal? How to classify them. Hence I would like to summarise Some basic details of the contractand its classification .

A) What is a Contract?

-Section 2(h) of the Indian Contract Act defines the term "Contract"

to understand Contract firstly we have to understandSome keywords

(1) Proposal:- when one personSignifyanother to do or not to do something willingly it is known as a "Proposal"

(2) Promise:-when a proposal is accepted it is known as a "Promise"

(3) Legal Consideration:-Something Done at the desire of the promise to act something or not to actSuch act is known as "Consideration".

(4) Agreement:-Promise or set of promises with lawful consideration is Known as " Agreement"

Now, We define a Contract

"Contract"

As per the Section 2(h) of the Indian Contract Act "Contract is legally enforceable Agreement between two parties or more than two Parties "

Simply we can say that,

Proposal+ Acceptance= Promise

Promise/Set of Promise+ lawful consideration= Agreement

Agreement+ Enforced by law= Contract

(B) Essential Element of Contract:-

we can say that "every contract is an agreement but every agreement is not a Contract".

From the definition of the Contract, We can Classifysome Essential Elements of the Contract

I.Offer

II.Acceptance

III.Lawful Consideration

IV.Enforced By law

V.Free of Consent

VI.Two or more parties with legal Capacity( i.e Sound mind, Major, etc)

(C ) Classification of Contract

We can classify the contract into three parts.

I.Based on a model of its formation

II.Based on its validity

III.Based on its Performance

Classification of Contract

(1)Based on the model of its formation

Following its model offormation, negotiation, and functionwe can classify a contract into four parts

a)Express Contract:- if the terms of the contract are expressly agreed upon the and by and between the parties at the time of its formation it isknown as an "Express Contract"

b)Implied Contract:-Section 9 of the Indian Contract Act says that, " Any Promise or acceptance which is made otherwise than in words if a contract can be inferred from the conduct of the parties or criticismthey are called “Implied Contract "

c)Quasi Contract:- Any contract created by law or imposed by law to do or not to do somethingis called "Quasi Contract"

d)E-Contract:- “E -Contracts” are the contract generated through the Electronic medium Like websites, E-mail

(2)Based on Validity

Following its legal Validity, we can Clarify the Contract in Fivedifferent types

a)Valid Contract:- Any Contract that Satisfies all legal requirements of the Contract under the Contract Act isKnown as a "Valid Contract". Section 10 of the Indian Contract Act defines Valid Contract

b)VoidContract:- Any Agreement enforceable by law can be determined as a "Void Contract"

c)Voidable Contract:- Any Agreement which is enforceable by law at the option of one or more of the parties to the contract but not at the option of the others is a "Voidable Contract"

d)Illegal Contract:- Any Agreement which is forbidden by law (Violate the Law) is known as "Illegal Contract"

e)Unenforceable Contract:- Any Agreementwhich is valid but not enforceable by any law is known as "Unenforceable Contract"

(3) Based on Performance

Following Performance we can classify Contracts in Four Different types :

(a)Execute Contract:-When both parties of the Contract have to fulfill all of their respective obligations(Responsibilities ) it is known as an "Execute Contract"

(b)Executory Contract:- When Both partiesof the Contracthaveto yetperform their respective obligations(Responsibilities ) it is known as an "Executory Contract"

(c)Unilateral Contract:-"Unilateral Contract"is a one side Contract in which only one party has to fulfil all his respective Obligations

(d)Bilateral Contract:-When Both Parties Committees to Perform their respective promises andObligation it is Known as a "Bilateral Contract"

Simply we can say that any set of promises with lawful consideration enforced by law is a contract and it can be classified by way of its validity, its formation, and its performance.