This document discusses different types of contracts under business law. It outlines contracts based on enforceability such as valid, voidable, void, and unlawful contracts. It also categorizes contracts based on mode of creation including express and implied contracts. Finally, it examines contracts based on execution like executed, executory, and constructive contracts. The key points are valid contracts are enforceable by law, voidable contracts are enforceable until avoided, and unlawful contracts are void from the beginning.

1. BUSINESS LAWANDLEGAL
ENV
Lecture 3
(27.2.2015)
Presenter:
ISMATULLAHBUTT
PhD(S)

2. Kinds of Contracts
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(A)Based on Enforceability:
1) Valid Contract
2) Voidable Contract
3) Void Contract
4) Unenforceable Contract
5) Illegal or Unlawful Contract
(B) Based on Mode of Creation:
1) Express Contract
2) Implied Contract
(C) Based on Execution:
1) Executed Contract
2) Executory Contract
3) Constructive or Quasi Contract

3. Kinds of Contracts
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1. Valid Contract:
 An agreement enforceable by law.
 It contains all the essential elements of a valid
contract.
2. Voidable Contract:
 An agreement which is enforceable by law at the
option of one or more of the parties thereto. {Sec 2 (i)}
 Until it is avoided or rescinded by the party entitled to
do so by exercising his/her option, it is a valid contract.

4. Kinds of Contracts
4
3. Void Contract:
 The word ‘Void’ literally means ‘not binding in law’.
 ‘Void contract’ implies a useless contract which has no
legal effect at all.
 A contract which ceases to be enforceable by law
becomes void, when it ceases to be enforceable.{ Sec 2
(j)}
 This was originally a valid and binding on the parties at
the time of its inception but subsequent to its formation it
becomes invalid and destitute of legal effect due to
certain reasons.

5. Kinds of Contracts
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4) Unenforceable Contract:
 This is a valid contract, but is incapable of being enforced in
a court of law due to some technical defect e.g. unwritten,
unregistered, inadequate stamping, time-barred etc.
 An oral arbitration agreement must be in writing, B/E and
D.P. Note become time-barred after 3 years.
5) Illegal orUnlawful Contract:
 This agreement is void ‘ab-initio’.
 An agreement is illegal and void if its object or consideration
is;(a) forbidden by law; or (b) if permitted, it would defeat the
provisions of any law; or (c) is fraudulent; or (d) involves or
implies injury to any person or property of another; or (e) the
court regards it as immoral or opposed to public policy (Sec
23).

6. Kinds of Contracts
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Express Contract:
 When both, offer and acceptance constituting an
agreement enforceable at law are made in words
spoken or written.
Implied Contract:
 When both offer and acceptance constituting an
agreement enforceable at law are made otherwise than
in words e.g. by acts or conduct of the parties.
NB: in re spe ct o f m o de o f cre atio n, ce rtain co ntracts m ay
be a m ixture o f the ‘e xpre ss’ and ‘im plie d’ type s o f
co ntracts. He re o ne o f the two co m po ne nts o f an
ag re e m e nt (o ffe r and acce ptance ), o ne is e xpre sse d in
wo rds and the o the r is im plie d fro m acts o r
circum stance s.

7. Kinds of Contracts
Constructive orQuasi Contract:
 The term is a misnomer as contracts grouped under it
have little or no affinity with contract.
 Such contracts are covered under Sec 71 &72
respectively.
 Such a contract doe not arise by virtue of any
agreement, express or implied between the parties but
the law infers or recognizes a contract under special
circumstances.
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8. Kinds of Contracts
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Executed Contract:
 When both the parties to a contract have completely
performed their share of obligations under the contract.
 When only one party to a contract has performed his
share of obligations, it is called unilaterally executed
contract.
Executory Contract:
 When obligations to the contract, either wholly or in part
still remain to be performed by one or either party to the
contract.