Indian Contract Act, 1872

1. CLASSIFICATION OF
CONTRACTS
BUSINESS LAW
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

2. ESSENTIAL ELEMENTS OF A VALID
CONTRACT
Essential
Elements
of
a
Valid
Contract
Offer and Acceptance
Legal Relationship
Lawful Consideration
Capacity of the Parties
Free Consent
Legality of the object
Legal Formalities
Certainty
Possibility of performance
Not expressly declared void
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

3. CLASSIFICATION OF CONTRACTS
CLASSIFICATION OF
CONTRACTS
ON THE BASIS OF
ENFORCEABILITY
VALID
CONTRACT
VOID
CONTRACT
VOIDABLE
CONTRACT
UNENFORCEABLE
CONTRACT
ON THE BASIS OF
CREATION
EXPRESS
CONTRACT
IMPLIED
CONTRACT
QUASI
CONTRACT
ON THE BASIS OF
EXECUTION
EXECUTED
CONTRACT
EXECUTORY
CONTRACT
UNILATERAL
CONTRACT
BILATERAL
CONTRACT
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

4. 1. ON THE BASIS OF ENFORCEABILITY /
VALIDITY
a) Valid Contract
 Agreement is binding and enforceable
 Contains all the essential elements of a valid contract
b) Void Contract
 When a contract suddenly ceases to be enforceable by law
 Due to subsequent impossibility or subsequent illegality
 Void Contract has no Value
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

5. 1. ON THE BASIS OF ENFORCEABILITY /
VALIDITY
c) Voidable Contract
 Enforceable by law at the option of one of the parties.
 For example, if in case a contract has been signed initially by
using coercion (threatening) or undue influence (positional
influencing), misrepresentation (miscommunication) or fraud
(deceiving), the aggrieved party (victim) may come forward to
rescind (cancel) the contract later, after which the contract
becomes void.
d) Unenforceable Contract
 A contract becomes unenforceable due to some technical defect
 For example, a bill of exchange becomes unenforceable after
3 years period.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

6. 2. ON THE BASIS OF CREATION /
FORMATION
a) Express Contract
 Both offer and acceptance are made by words (spoken /
written)
b) Implied Contract
 Evidence of the agreement by the acts and conduct of the
parties
 Example : a person getting into a public bus, a person
taking a cup of coffee in a hotel
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

7. 2. ON THE BASIS OF CREATION /
FORMATION
c) Quasi Contract
 It is a principle that a person shall not be allowed to enrich
himself unjustly at the expense of another person.
 Basically it’s a liability of a person. Not a direct contract.
 Example : a finder of lost goods is under a legal
obligation to return them to their true owner.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

8. 3. ON THE BASIS OF EXECUTION /
PERFORMANCE
a) Executed Contract
 Both the parties have already performed their legal
obligations.
 For example : a person goes to a grocery to buy 1
kg onions. He pays Rs.30 and bought the onions.
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

9. 3. ON THE BASIS OF EXECUTION /
PERFORMANCE
b) Executory Contract
 The legal obligations have not been performed yet.
i) Unilateral Contract
 One party has performed and another party
is yet to perform the legal obligations.
 For example : Prepaid mode
ii) Bilateral Contract
 Both legal obligations are outstanding.
 For example : Cash on Delivery (COD) mode
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

10. CLASSIFICATION OF CONTRACTS
CLASSIFICATION OF
CONTRACTS
ON THE BASIS OF
ENFORCEABILITY
VALID
CONTRACT
VOID
CONTRACT
VOIDABLE
CONTRACT
UNENFORCEA
BLE
CONTRACT
ON THE BASIS
OF CREATION
EXPRESS
CONTRACT
IMPLIED
CONTRACT
QUASI
CONTRACT
ON THE BASIS OF
EXECUTION
EXECUTED
CONTRACT
EXECUTORY
CONTRACT
UNILATERAL
CONTRACT
BILATERAL
CONTRACT
S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM

11. S.M. GOLDYN ABRIC SAM, ASST. PROFESSOR, DEPT. OF MANAGEMENT STUDIES, NMCC, MARTHANDAM