Types of contract under Indian Contract Law.pptx

This presentation on “Types of Contracts under Indian Contract Law” provides a comprehensive explanation of the various classifications of contracts recognized under the Indian Contract Act, 1872. It covers the basis of classification—such as validity, formation, and performance—highlighting distinctions between valid, void, and voidable contracts; express, implied, and quasi contracts; and executed and executory contracts.

Designed for commerce, management, and law students, this PPT simplifies the concepts through clear definitions, examples, and case illustrations, making it easy to understand and remember.

Key Highlights:

Classification of contracts by validity, formation, and performance

1. B usiness Law B y Ms. Keerthana C, M.Com ., NET Assistant Professor, Department of Commerce RM Sri Ramakrishna College of Arts and Science

2. Types of Contract I. Based on Enforceability 1. Valid Contract Definition : A contract that satisfies all legal requirements (as per Section 10 of the Indian Contract Act, 1872) and is enforceable by law. Example : A agrees to sell his bike to B for ₹10,000. B agrees to buy it. This is a valid contract — offer, acceptance, consideration, free consent, and lawful object are present.

3. 2. Void Contract (Section 2(j)) Definition : A contract that was valid initially but later becomes unenforceable due to some reason. Example : A agrees to sell a house to B, but before the transaction, the house is destroyed in a fire. Now, the contract becomes void. 3. Voidable Contract (Section 2( i )) Definition : A contract enforceable at the option of one party only. Example : If A forces B to sign a contract under threat, it is voidable at B’s option. B can either accept it or reject it.

4. 4. Illegal Contract Definition : A contract involving an unlawful act. Such a contract is void and punishable by law. Example : A and B agree to smuggle goods across the border. This is illegal and hence, no party can enforce it. 5. Unenforceable Contract Definition : A contract that cannot be enforced due to technical issues like non-registration, lack of stamp duty, etc. Example : An oral agreement to sell immovable property is unenforceable unless in writing and registered.

5. II. Based on Formation 1. Express Contract (Section 9) Definition : A contract formed by spoken or written words. Example : A written job offer from a company to a candidate with specific salary and role mentioned. 2. Implied Contract (Section 9) Definition : A contract formed by conduct or actions of the parties. Example : You go to a restaurant, order food, and eat. It’s an implied contract to pay for the food.

6. 3. Quasi Contract (Sections 68–72) Definition : Not a real contract, but obligations imposed by law to prevent unjust enrichment. Example : A finds B’s lost wallet and returns it. A is entitled to reimbursement of any reasonable expenses incurred. 4. Tacit Contract Definition : Implied contract inferred from circumstances or behavior. Example : Using an ATM — you insert your card, and by your actions, you agree to the bank's terms.

7. III. Based on Performance 1. Executed Contract Definition : A contract in which both parties have completed their obligations. Example : You buy a book and pay the price — transaction is complete. 2. Executory Contract Definition : A contract in which performance is due by one or both parties in the future. Example : A contracts to deliver goods to B next week. B will pay upon delivery.

8. 3. Unilateral Contract Definition : Only one party makes a promise, and the other performs an act. Example : A announces a reward of ₹1,000 for finding his lost dog. Anyone who finds the dog and returns it accepts the offer by performance. 4. Bilateral Contract Definition : Both parties make promises to perform certain duties. Example : A agrees to sell his car to B for ₹2 lakh. B agrees to buy and pay the amount — both are bound to perform.

9. IV. Based on Obligation 1. Absolute Contract Definition : A contract that is not dependent on any condition. Example : A agrees to deliver 10 bags of rice to B on a fixed date. No external condition is involved. 2. Contingent Contract (Section 31) Definition : A contract dependent on a future uncertain event. Example : An insurance contract — A will receive payment only if a fire damages his house.

10. V. Special Types of Contracts 1. Contract of Indemnity (Section 124) Definition : One party promises to compensate the other for any loss. Example : A agrees to protect B from any loss caused by a legal case. If B suffers a loss, A will compensate. 2. Contract of Guarantee (Section 126) Definition : A third party (surety) promises to pay if the principal debtor defaults. Example : C takes a loan from a bank. A signs as guarantor. If C doesn’t pay, A will be liable.

11. 3. Contract of Bailment (Section 148) Definition : Delivery of goods from one person (bailor) to another (bailee) for a purpose. Example : A leaves his watch with B (a repair shop). B must return it after repair. 4. Contract of Pledge (Section 172) Definition : Bailment of goods as security for a loan. Example : A pledges gold with a bank for a loan. The bank can sell it if the loan is not repaid.

12. 5. Contract of Agency (Section 182) Definition : One person (agent) is authorized to act on behalf of another (principal). Example : A authorizes B to buy goods on his behalf in another city. B becomes an agent.