Types of contracts|The Indian Contract Act 1872 Notes|

Contracts form the backbone of legal relationships, defining obligations, rights, and remedies. For law students and professionals alike, understanding the types of contracts is essential. Contracts can be classified based on their creation, validity, execution, and liability. This article delves into these classifications, offering clarity on concepts like express contracts, voidable contracts, and quasi-contracts, enriched with examples for practical understanding. We’ll also discuss essential types of offers within contract law, such as general, specific, and cross-offers.

Types of Offers in Contract Law

1. Express Offer:
   An express offer is made explicitly through words, either spoken or written. It clearly states the terms and conditions of the offer, leaving no room for ambiguity.
   Example: A says to B, “I will sell you my car for ₹500,000.”

2. Implied Offer:
   An implied offer is not expressed in words but is inferred from the actions or conduct of the parties involved. It arises from circumstances and does not require explicit communication.
   Example: When a person orders food at a restaurant, there is an implied offer to pay for the meal upon service.

3. General Offer:
   A general offer is made to the public at large, and anyone can accept it. This type of offer is typically used in promotional campaigns or rewards.
   Example: A company advertises a reward for anyone who returns a lost dog.

4. Specific Offer:
   A specific offer is directed to a particular individual or group. Only the person or group to whom the offer is made can accept it.
   Example: A offers to sell his bike to B for ₹20,000.

5. Cross Offer:
   A cross offer occurs when two parties make identical offers to each other simultaneously without knowledge of each other’s offer. This does not result in a binding contract until one of the offers is accepted.
   Example: A offers to sell his bike to B, and at the same time, B offers to buy A’s bike, both unaware of the other’s offer.

6. Counter Offer:
   A counter offer is made in response to an original offer, changing its terms. This nullifies the original offer and creates a new one, which the other party can then accept or reject.
   Example: A offers to sell his car for ₹500,000. B responds, “I will buy it for ₹450,000.” B’s response is a counter offer.

7. Standing Offer:
   A standing offer is an offer that remains open for acceptance over a period of time. It is not a single transaction but allows multiple acceptances under the same terms until revoked.
   Example: A agrees to sell B a certain quantity of goods at a specified price whenever B places an order during the year.

Differences Between Types of Offers

 Other Types of contracts :-

1. On the Basis of creation
   1. Express contract
   2. Quasi contract
   3. Tacit contract
   4. Implied contract
   5. E contract
2. On the Basis of Validity
   1. Valid contract
   2. Void contract
   3. Voidable contract
   4. Unenforceable contract
   5. e. Illegal contract
3. On the Basis of execution
   1. Executed contract
   2. Executed contract
   3. Partly executed and Party executory
4. On the Basis of Liability
   1. Bilateral contract
   2. Unilateral contract

On the Basic Creation

On the Basis of Validity:

1. Valid contract:- An agreement which satisfies all the requirements prescribed by law On the basis of creation
2. Void contract (2(j)):– a contract which ceases to be enforceable by law because void when of ceased to be enforceable When both parties to an agreement are:-
   • Under a mistake of facts [20]
   • Consideration or object of an agreement is unlawful [23]
   • Agreement made without consideration [25]
   • Agreement in restrain of marriage [26]
   • Restraint of trade [27]
   • Restrain legal proceeding [28]
   • Agreement by wage of wager [30]
3. Voidable contract 2(i) :– an agreement which is enforceable by law at the option of one or more the parties but not at the option of the other or others is a voidable contract. Result of coercion, undue influence, fraud and misrepresentation.
4. Unenforceable contract: – where a contract is good in substance but because of some technical defect i.e. absence in writing barred by imitation etc one or both the parties cannot sue upon but is described as unenforceable contract. Example: Writing registration or stamping. Example: An agreement which is required to be stamped will be unenforceable if the same is not stamped at all or is under stamped.
5. Illegal contract:- It is a contract which the law forbids to be made. All illegal agreements are void but all void agreements or contracts are not necessary illegal. Contract that is immoral or opposed to public policy are illegal in nature.
   • Unlike illegal agreements there is no punishment to the parties to a void agreement.
   • Illegal agreements are void from the very beginning agreements are void from the very beginning but sometimes valid contracts may subsequently becomes void.

On the Basic of execution:

1. Executed contract :- A contract in which both the parties have fulfilled their obligations under the contract. Example: A contracts to buy a car from B by paying cash, B instantly delivers his car.
2. Executory contract:- A contract in which both the parties have still to fulfilled their obligations. Example : D agrees to buy V’s cycle by promising to pay cash on 15th July. V agrees to deliver the cycle on 20th July.
3. Partly executed and partly executory:- A contract in which one of the parties has fulfilled his obligation but the other party is yet to fulfill his obligation. Example : A sells his car to B and A has delivered the car but B is yet to pay the price. For A, it is excuted contract whereas it is executory contract on the part of B since the price is yet to be paid

On the Basic of Liability

1. Bilateral contract:- A contract in which both the parties commit to perform their respective promises is called a bilateral contract. Example : A offers to sell his fiat car to B for Rs.1,00,000 on acceptance of A’s offer by B, there is a promise by A to Sell the car and there is a promise by B to purchase the car there are two promise.
2. Unilateral contract:- A unilateral contract is a one sided contract in which only one party has to perform his promise or obligation party has to perform his promise or obligation to do or forbear. Example :- A wants to get his room painted. He offers Rs.500 to B for this purpose B says to A “ if I have spare time on next Sunday I will paint your room”. There is a promise by A to pay Rs 500 to B. If B is able to spare time to paint A’s room. However there is no promise by B to Paint the house. There is only one promise.

Difference Between Void and Voidable Contract

Difference between Void and illegal Agreement