The document discusses different classifications of contracts: 1. Based on enforceability contracts can be valid, void, voidable, unenforceable, or illegal. Void contracts become unenforceable due to subsequent issues while void agreements are invalid from the beginning. 2. Contracts are also classified based on formation as express, implied, constructive, e-commerce, or standard form contracts. 3. A third classification is based on performance, distinguishing executed, executory, unilateral, and bilateral contracts. 4. English law also recognizes formal contracts like contracts of record, contracts under seal, and simple contracts.

1. Classification of Contract
(A) On the basis of Enforceability
1. Valid Contract :An agreement which is enforceable by law is a
valid contract. A contract to enter into a contract is not a valid
contract.
2. Void Contract : an agreement was valid when enter into but due to
some supervening impossibility of performance become void. A void
contract is not unlawful but is destitute of legal effects.
3. Void Agreement : acc. To sec. 2(g) “ An agreement which is not
enforceable by law by either of the parties is void.” it is void ab initio
i.e. These are void at the beginning like agreement with a minor.
4. Voidable contract : acc. To sec2(i) “ An agreement which is
enforceable by law at the option of one or more of the parties but not
at the option of the other or others is a voidable contract”. This is
because of absence of free consent in the contract. Rights and
obligations are created and contract is valid until the option to avoid
it exercised by the person whose consent to the agreement was not
free.
Mamta Sharma, Asstt. Prof. in Management

2. Mamta Sharma, Asstt. Prof. in Management
5. Unenforceable Contracts : contracts which are valid but due to some defects like not
in written form , not signed etc. are unenforceable contract. Because these can
be sued in the court but cannot be proved.
6. Illegal Agreements : which is prohibited by law or against the policy of government
are called illegal agreements. It is void ab initio. It is different from void agreements
as all illegal agreements are void but all void agreements or contracts are not
necessarily illegal.
(B) ON THE BASIS OF FORMATION
1. Express Contracts: A contract which is entered into either spoken or written form.
2. Implied Contract : where proposal or acceptance is made otherwise than in words is
implied contract.
3. Constructive or quasi contract : where there is no intention on either side to make a
contract but law imposes a contract. In this rights and obligation arises out of
contract between the parties not because of agreement but operation of law. Like
finder of lost goods is under an obligation to find out the true owner and return the
goods.
4. E-Com Contracts : contracts entered into by parties using internet.
5. Standard Form Contracts.: business firms enter into large no. contracts daily so for
the sake of convenience they use standard form of contracts e.g. an insurance co.
may draft an insurance policy contract etc.

3. Mamta Sharma, Asstt. Prof. in Management
(C ) ON THE BASIS OF PERFORMANCE :
1. Executed Contract : where both the parties have completed their obligations or carried
out the terms of the contracts.
2. Executory Contract : where contract is yet to perform wholly or partially or one or both
of parties have to perform their obligations.
it is of two types
a) Unilateral : where a promise on one side is exchanged for an act on the other side.
Where one party has discharged his obligation either before or at time of entering into
contract.
b) Bilateral Contract : where a promise on one side is exchanged for a promise on the part
of other party.
(D) ACC. TO ENGLISH LAW
1. Formal Contract : these are in vogue in england but recognised in Indian Act .
Consideration is not essential in such contracts
(a) Contract of Record : these are judgements and recognisances. Such contracts exist by
reason of entry in the records of court in which the proceedings are brought.
(b) Contracts under seal : contracts created by a sealed document which is called a ‘deed’
these are executed by some formalities. The following must be under seal
1. Contract without consideration
2. contracts by corporation or company
3.contract of lease relating to land for more than three years.
4. contract of transfer of british ship
(c) Simple contract : contract which are not formal are simple contract. Also called ‘parol’
contract.

4. Difference between
Void Contract and Void Agreement
1. A contract does come
into existence but
subsequently ceases to be
enforceable by law.
2. An agreement which
becomes illegal in the
course of performace is a
case of void contract.
1. An Agreement not
enforceable at law is a
void agreement.
Agreement with minor is
void. In void agreement
no contract comes into
force.
2. An agreement which is
null and void ab initio is a
case of void agreeent
Mamta Sharma, Asstt. Prof. in Management

5. Difference between
Illegal Agreement and void Agreement
1. All illegal agreements
are void.
2. The parties are liable to
punishment.
3. Transaction collageral to
illegal agreements are
also tainted with
illegality and hence
become void because’Ex
turpi causa,non oritor
actio’ i.e. out of illegal
agreements no cause of
action arises.
1. These are broader in
scope. These may be
void for a reason other
than illegality.
2. The parties are not
punished.
3. Transaction collateral to
void agreements are
enforceable under law.
Mamta Sharma, Asstt. Prof. in Management

6. Difference between
voidable contract and void agreement
1. When one of parties may affirm or
reject at his option . It is valid and
enforceable till it is repudiated or
rescinded.
2. Defect in voidable contract is
curable and can be condoned.
3. In this a third party can acquire a
valid title from a person claiming
under such a contract.
4. In this a person is entitled to
compensation for loss or damages
suffered by him on account of the
non performance of the contract.
5. It does not affect the collateral
transaction.
1. These has no legal effects from
the very beginning. It is
unenforceable.
2. It is void ab initio and defects are
incurable.
3. In this a third party cannot acquire
any right from person claiming
under it.
4. In this no compensation arises
because these are unenforceable.
5. In void agreement on account of
illegality of object collateral
transaction will also become void.
Mamta Sharma, Asstt. Prof. in Management