CLASSIFICATION / KINDS OF CONTRACT

On the basis of :1. Enforceability2. Mode of creation3. Extent of execution 4. English law

VOID AGREEMENT

Sec.2(g) : “an agreement not enforceable by law is said to be void”

Void ab-initio Absence of one or more essential elements

of valid contract but ‘free consent ‘ Agreements expressly declared void

Obligation

Sec.65 calls for restitution of benefits received from void contract

When ?

Restitution is allowed in the following circumstances

1.Agreement caused by bilateral mistake of essential facts

2.Minor committing fraud by misrepresenting his age

3.In case of valid contracts

Unenforceable contract

Which cannot be enforced in the court of law because of :

a) Technical Defects: Absence of writing

b) The remedy has been barred by Lapse of Time

*in the event of repudiation of such contract, the aggrieved party wil not be entitled to legal remedies

Illegal agreements

Which transgress some rules of basic public policy

Is forbidden by law Criminal in nature Fraudulent Immoral Involves or implies injury to the person or

property of another

CASE

My dear friend Vijay borrows Rs.50000 from Anil and enters into a agreement with Lashkar e Taiba to import 20 ‘A K -47 ‘

Anil knows the purpose of loan .

Later Vijay refused to pay the money …. What can Anil do !!!!

An illegal agreement even taints the collateral agreements with illegality .

Classification according to Formation/Mode of Creation

EXPRESSED QUASIIMPLIED

EXPRESS CONTRACT

If the terms of the contract are expressly agreed upon (whether by words spoken or written )at the time of formation of contract

Sec(9):where the offer and acceptance of any promise is made in words,the promise is said to be express.

IMPLIED CONTRACT

SEC(9):where the proposal or acceptance of any promise is made otherwise than in words, the promise is said to be implied

An implied contract is one which is inferred from the acts or conducts of the parties or course of dealings between them

Getting into bus Takes a meal in the restaurant Coolie

Quasi/constructive Contract

These contracts does not arise by the virtue of any agreement, Expressed or implied between the parties but the law infers or recognizes a contract under certain special circumstances

It is the contract created by law It imposes a legal obligation on a party who is required to

perform it. “A person should not be allowed to enrich himself unjustly

at the expenses of another”.

CASE:1

Mr.Sabhilash a big businessman in vizag ,supplies goods to his customer Mr.Adi...who consumes them…..

Will Adi pay for the goods ?

Case2:

In the above case Sabhilash’s partner Mr.Raju delivers the goods to Mr.Ravi mistaking Ravi for Adi…

Do ravi need to pay for the goods consumed?

Classification according to Performance /Extent of execution

EXECUTED EXECUTORY

CONTRACT

EXECUTED CONTRACT

Contract where both the parties have completely performed their respective Obligations

CASE

Gabbar singh is a renowned dacoit in Prakasham dist.govt has announced a cash prize of Rs.50,000 to a person who catches him live of dead . Mr.Rambabu a brave man catches Gabbar singh and hands him over to police ….

Is the contract said to be executed ?

EXECUTORY CONTRACT

Contract in which both the obligations are Outstanding.

Partly executed and Partly executory

Unilateral Bilateral

Contract

UNILATERAL CONTRACT

Contract where only one obligation remains outstanding, the other obligation having being performed at the time of or before the formation of the contract

Bilateral Contract

At the time of formation of contract the obligation on the part of both the parties to the contract are outstanding

CLASSIFICATION OF CONTRACT IN ENGLISH LAW

FORMAL

CONTRACT

SIMPLE

CONTRACTS OF RECORDS

FORMALCONTRACT

CONTRACTS UNDER SEAL

Contracts of Records

A contract of record is either a judgment of court or Recognizance

Recognisance:

It is a written acknowledgement of debt due to the Crown.It is usually met with in connection with criminal proceedings

Contracts of records derive their binding force from the authority of the court. They lack the essential element consensus.

They are enforced by court

Contracts Under seal

It derives its binding force from its form alone.

It is in writing and is signed,sealed and delivered by the parties. It is also called as deed or specialty contracts.

Contracts under seal

Contracts which must be made under seal , includes

1. Contracts made without consideration

2. Contract made by corporations

3. Conveyance in legal estate of land or any interest in land ,including leases of land for more than 3 years .

4. A transfer of a british ship or any share therein

Simple contracts

All contracts which are not made under seal are simple contracts

All contracts under Indian law must be supported by consideration

OFFER AND ACCEPTANCE

Offer : definite

Acceptance : unconditional

What ?

Sec2(a):A person is said to have made a proposal when he “signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining his assent of that other to such act or abstinence”.

Sec2(c):when the offeree accepts the offer, he is called the acceptor or Promisee

.

HOW?

1.EXPRESS

2.IMPLIED

3.SPECIFIC

4.GENERAL

EXPESS OFFER

My Dear intelligent students …..I DON’T BELIVE IN REPEATING……PLEASE USE YOUR BRAIN AND ANSWER

IMPLIED OFFER

My Dear intelligent students …..I DON’T BELIVE IN REPEATING……PLEASE USE YOUR BRAIN AND ANSWER

ALSO GIVE EXAMPLES …

SPECIFIC OFFER:

Offer made to a definite person, it can be accepted only by that person to whome it is made

GENERAL OFFER

When the offer is made to the world at large.

Ex: Sach ka samna

Ex: Information about thief's

Ex: finding lost goods/things

*acceptance can be made only by the first person who gives the information

What constitutes an offer

1. Intention to be bound by it

2. View to obtain the assent of offeree

3. Definiteness

4. Communication to offeree

Legal rules as to offer

A valid offer must be in conformity with the following rules:

1.An offer must be ‘express’ or implied

Implied or Express

1.A says to B that he is willing to sell his house to him for Rs.50000

2.APSRTC runs different buses in different routs

3.A shoe shiner starts to shine some one’s shoes without being asked to do so

2.An offer must contemplate to give rise to legal consequences and be capable of creating legal relationship

Valid offer or not

A promised to his wife that he will take her to a movie every Friday

B invited his friend C for dinner A offers to sell his mobile(6600) to C for

Rs.5000.

3.The terms of offer must be definite, unambiguous and certain and not loose and vague.

case

1. A an owner of 3 cars says to B, “ I will sell you my car”.

2. B says to C that sell me your Car I will give you amount that I can afford.

3. X purchased a horse from y and promised to buy another if the first one proves lucky.

An invitation to offer is not an offer