TYPES OF CONTRACT

meeting, relationship, business

The contract act 1872, clarifies the validity of contracts as follows:

  1. Valid contract
  2. Void contract
  3. Voidable contract
  4. Unenforceable contract
  5. Illegal contract

Valid contract: section 2(h)and 10:

 A contract is said to be valid if it is enforceable by a court of law.

  • There must have an agreement.
  • It should be enforceable by law.

   A contract to be enforceable in the court of law should contain all the essentials of a contract which is mentioned under section 10 of the Indian contract act 1872.

All agreements which are made through free consent, which have a valid consideration and where two parties are present willingly are not hereby expressly declared to be void.

Every contract is an agreement, but every agreement is not a contract an agreement becomes a contract where the following conditions are satisfied:

  • Consideration is a must and should towards the contract (section d and section 25)
  • Parties should be competent (section 11 and section 12)
  • Consent should be free (section 13-22)
  • The object should be lawful (section 23-30)

Void contract section 2(g):

Any contract which is not enforceable by law is void, a void contract is an agreement that doesn’t have a legal effect and is void ab initio.

E.g.: a contract without any consideration.

Section 24 to 30 and 56 of the Indian contract act1872 lay down the provisions which are relating to the agreements, which are said to be void.

  • Agreement’s void, if considerations and objects unlawful in part (section 24)
  • Agreement without consideration (section25)
  • Agreements in restraint of marriage (section26)
  • Agreements in restraint of trade (section 27)
  • Agreements in restraints of legal proceedings (section 28)
  • Unmeaning agreements (section 29)
  • Wagering agreements (section 30)
  • Agreements to do impossible acts (section 56 )

Voidable contract (section 2(I)) :

A voidable contract is where any one of the parties has the power to cancel the contract if it is challenged.

Section 2(i) An agreement which is enforceable by law at the option of one or more of the parties thereto, but not at the option of the other or others, is a voidable contract.

Eg: A contract entered into out of coercion, undue influence or misrepresentation, etc, is said to be voidable

             Difference between void and voidable contract

Void contract Voidable contract
1)    Section 2(g) defines void contact Section 2(i) defines voidable contract
2)    It is not at all enforceable by law. it can be enforceable at the option of one of the party

 

Unenforceable contract:

An unenforceable contract is a contract, which is valid for all practical purposes until and unless its validity is challenged.it cannot be enforced due to technical defects .it can be enforced in the future after the technical defect is removed.

Illegal contract:  

An illegal contract is one, which is immoral or against the law. An illegal contract is void and is a crime under section 120-A of the Indian penal code. However, every void contract is not illegal.

 

Reference: 1) https://indiankanoon.org/

2) law of contract Dr s.s Srivastava

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