Kinds of Contracts

There are basically 5 types of Contracts

  1. Valid contract

  2. Void Contract

  3. Voidable Contract

  4. Unenforcable Contract

  5. Illegal Contract

    Valid Contract :                                                                                                         A contract s said to be valid if it is enforcable by law. According to Sec 2(h) of Indian Contract Act, ” an agreement enforcable by law is a contract”.  Therefore, to constitute a contract-   i) There must exist an agreementii) The agreement should be enforcable by law.A contract to be enforcable, it must contain all the essentials enshrined in Sec 10 of Indian Contract Act     What agreements are contracts.—All agreements are contracts if they are made by the free consent of parties competent to contract, for a lawful consideration and with a lawful object, and are not hereby expressly declared to be void..   ” Nothing herein contained shall affect any law in force in 1[India], and not hereby expressly repealed, by which any contract is required to be made in writing 2or in the presence of witnesses, or any law relating to the registration of documents.                                                                                         Every Contract is an agreement but every agreement is not a contract. An agreement becomes a contract when the following conditions are satisfied.                  i) There is some consideration to contract                                                                     ii)The parties are competent to contract                                                                  iii)Their consent is free                                                                                                    iv)Their object is lawful                                                                                                                                        2.  Void Contract                                                                                                              A contract which is not enforcable by law is a  void contract. Void contract is an agreement  without any legal effect and is void ab initio or it becomes void subsequently.   According to Section 2(g) in The Indian Contract Act, 1872, An agreement not enforceable by law is said to be void;       Sections 24 to 30 and section 56 of Indian contract act lay down the provisions    relating to the agreements which are declared void as stated below:

    i) Agreements of which consideration and objects are unlawful in part(S.24) ii)Agreements without consideration iii)Agreements in restraint of marriage  iv) Agreements in restraint of trade v) Agreements in restraint of legal proceedings vi) Unmeaning agreements vii) Wagering agreements viii)  Agreements to do impossible acts

    Voidable Contract                                                                                                                                     Voidable contract is something different and particular.One of the parties to the contract alone will have an option to repudiate/challenge/ cancel the contract.If it is challenged, it maybe declared void. If it is not challenged, it may be allowed to continue as valid.                                                                      Sec 2(i) defines voidable contract as ” (i) 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;

     

    According to Section 19 of Indian Contract act,  Voidability of agreements without free consent.—When consent to an agreement is caused by coercion,  fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. —When consent to an agreement is caused by coercion,  fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.” A party to contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that he shall be put in the position in which he would have been if the representations made had been true.

                             Unenforcable Contract:

An unenforcable contract is a contract, which is valid for all practical purposes until and unless its validity is challenged/questioned. It cannot be enforced due to some technical defect. It can be enforced once the technical defect is cured.

                                     Illegal Contract

An illegal contract is one, which is immoral or against the law. An illegal contract is void and also a crime under section 12o-A of the Indian Penal Code. It is not only void but also an offense. However, every void contract is not illegal.

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