Classification Of Contracts

CLASSIFICATION / KINDS OF CONTRACT On the basis of : 2. Enforceability 3. Mode of creation 4. Extent of execution 5. 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 : b) Technical Defects: Absence of writing c) 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

IMPLIED

QUASI

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

CONTRACT

EXECUTED

EXECUTORY

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

Contract

Unilateral

Bilateral

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

CONTRACT

FORMAL

SIMPLE

FORMALCONTRACT

CONTRACTS OF RECORDS

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 2. Contracts made without consideration 3. Contract made by corporations 4. Conveyance in legal estate of land or any interest in land ,including leases of land for more than 3 years . 5. 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. 2. 3. 4.

Intention to be bound by it View to obtain the assent of offeree Definiteness 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. 2. 3.

A an owner of 3 cars says to B, “ I will sell you my car”. B says to C that sell me your Car I will give you amount that I can afford. 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