Kinds of Contract under Indian Contract Act – The Indian Contract Act came into force on 1st September 1872. It extends to the whole of India except to the State of Jammu and Kashmir. This Act deals with the principles of the Law of Contract. It is based on the principles of English common law and this Act passed by British India.
•Contract act originally contained 266 sections
a)Sections 1 to 75 – it deals with general principles of the law of contract.
b)Section 76 to 126 – it deals with contract relating to the sale of goods.
c)Sections 127 to 238 – it deals with special contracts, indemnity, guarantee, bailment and pledge and agency.
d)Sections 239 to 266 – it deals with contract relating with the partnership.
•Indian Contract Act divided into two Parts-
Part 1 contains Section 1to 75 which deals with the General principles of the law of contract.
b) Part 2 –
Part 2 deals with the special kinds of contracts as follow
1)Contract of indemnity and guarantee
2)Contract of bailment and pledged
3)Contract of agency
Section 2(a) of the Indian contract act defines the term offer. When one person signifies to another, his willingness to do or abstain from doing anything with a view to obtaining the assent of the other, to such an act or abstinence, he is said to make a proposal.
Section 2(b) of Indian contract act defines the term acceptance.
When the person to whom the proposal has been made signifies his assent thereto, the offer is said to be accepted.
Section 2(b) of Indian contract act defines the term promise. When a proposal accepted it becomes a promise. In other words, when an offer is accepted it becomes a promise.
4)Promisor and promisee –
Section 2(c) defines this term. When the proposal is accepted, the person making the proposal is called as promisor and the person accepting the proposal is called as promisee.
Section 2(d) of Indian contract act defines this term consideration. When at the desire of the promisor, promisee or any other person has done or abstained from doing or does or abstains from doing or promises to do or to abstain from doing something, such act or abstinence, or promise is called a consideration for the promise.
Promise + Consideration = Agreement
Section 2(e) of Indian contract act defines this term agreement.Every promise and every set of promises, forming the consideration for each other.
Section 2(h) of contract act defines this term contract. An agreement which is enforceable by law is a contract.
8)Reciprocal Promises –
Section 2(f) of Indian contract act defines this term Reciprocal Promises. Promises which form the consideration or part of the consideration for each other are called reciprocal promises.
9)Void Agreement –
Section 2(g) of Indian contract act defines this term Void Agreement. An agreement not enforceable by law is called void.
10)Voidable contract –
Section 2(i) of contract act defines this term Voidable contract.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.
11)Void contract –
Section 2(j) of the Indian contract act defines this term Void contract. A contract that ceases to be enforceable becomes void when it ceases to be enforceable.
Kinds of Contract under Indian Contract Act
There are 5 kinds of contracts. These are as follows –
1)Valid contract –
A valid contract means a contract that is a written or expressed agreement between the two parties to provide a product or service.
In a valid contract, all parties are legally bound. For a valid contract, the free consent of parties is a must. Agreement, capacity, consideration, and intention these elements are must for a valid contract.
•Agreement – It must be written or expressed and accepted by the other party and is enforceable by law.
•Capacity – For a valid contract the person whos enters the contract he/she has above age 18 i.e he/she has a major and sound mind.
•Consideration – There must be a consideration for a valid contract
•Intention – For a contract, there must intend to create a legal relationship between the parties.
•Case laws –
•Mr. Dinesh B. Chokshi vs Rahul Vasudeo Bhatt on 19 October 2012
•M.K. Modi vs U.K. Modi on 19 May, 2010
•Manoharlal Radhakrishna vs The Union Of India (Uoi) And Ors. on 8 August 1973
•New India Assurance Company vs Nagarathinamma on 5 August 2003
2)Void contract –
According to Section 2(j) of the Indian contract act Void contract means a contract that is unenforceable by law.
3)Voidable contract –
According to Section 2(i) of the contract act Voidable contract means a contract which is valid unless until avoided by either the party.
4)Illegal contract –
An illegal contract means an agreement that is forbidden by law.
5)Unenforceable contract –
An unenforceable contract means a contract that is valid but due to some technical defect, it becomes void and which is cannot be enforced in court. If defects are removed then the contract is enforceable.