Class 6 Types of Contracts (1)

8/19/2019 Class 6 Types of Contracts (1)

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The ContractAct

1872Types of Contracts


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Learning Objectives

Contracts can be classified into different

types based on 3 different criterions :

Validity

Formation

Performance


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Classification:

Based pon

!alidity

Classification of Contracts


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!oidabl

e

Contract

!oid

Agree"ent

!oid Contract#llegal

Agree"ents

$nenforceable

Contract

Classifications Based on Validity


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!oidabl

e

Contract

!oid


Agree"ents

$nenforceableContract Agree"ent

X threatens to kill Y if he

does not sell his house to X

for TK!"##"###

Y a$rees to sell the house

%ince Y&s consent has beenobtained by coercion" thecontract is 'oidable at

theoption of Y

!oidable Contract

(n a$reement )hich is

enforceable

the option

more of

by la) at

of one or

the partiesthereto" but

option of

not at the

or

others" is

the other

a *voidable

contract%& '(ec& 2)i*+


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!oid Agree"ent

• (n a$reement

notenforceable by la)

is said

to be void&• ( 'oida$reementdoes

not le$al

create

any ri$ht

or obli$ation

+ %uch a$reement isvoid-ab-initio

from the be$innin$

itself

!oidable

Contract

!oid

Agree"ent


Agree"ents

$nenforceable

Contract


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!oid Contract

• ( contract

ceases

enforceable

)hich

to be

by

la)becomes void )hen it

so ceases to beenforceable %ec ,-./

• 0n this case )hen the

contract )as entered

into" it may be 'alid andbindin$ onas per

the partiesla)"

but itsubse1uently

becomes 'oid

!oidAgree"ent

!oid Contract#llegalAgree"ents

$nenforceableContract

2$: in the case!oiodaf bliemport

contract" thea$reement is Conetnr af cot

rceable"

but

if

then it

subse1uently )ar brakes

out becomes 'oid contract


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#llegal Agree"ents

• (n

illegal

agree"ent is

one" )hich is a$ainst

some basic rule of public

policy or is of criminal innature or is immoral

• (n ille$al a$reement is

not only 'oid bet)een the

immediate parties but hasits further effect that e'en

the collateral transactions

to it become tinted )ith

ille$ality

!oidAgree"ent


Agree"ents

$nenforceableContract

r 4a.a borro)s TK5"### from r 4afi forthe purpose of importin$ prohibited $oodsr 4afi kno)s of the purposes ofa$reement The transaction bet)een r4afi and r 4a.a is collateral to thea$reement of importin$ 0t is ille$al since the

main a$reement is ille$al

Contract


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6nenforceable Contract

• (n

nenforceablecontract is one )hich

cannot be enforced in a

court of la) because of

some technical defectsuch as under7stamped

or absence of contract

in )ritin$• %uch

becomesonce the

contracts

enforceable

technicaldefect is remo'ed

!oidable

Contract

!oid

Agree"ent


Agree"ents

$nenforceable

Contract


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Classification:

Based pon

,or"ation



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Classifications based on Formation

28press

Contract

0mpliedontractC

9uasiContract


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28press Contract

• ( contract is called as

-.press Contract if

the terms of the

contract are e8presslya$reed upon

-)hether by )ords

spoken or )ritten/ at

the time of formationof contract

28press

Contract

0mplied

ontractC9uasi

Contract


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#"plied Contract

• 0n this case the

contract comes

into e8istence bythe acts or

conducts of the

parties

72$" ettin$

into a Public bus

28press

Contract

0mplied

ontractC9uasi

Contract


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9uasi Contract

A /asi

contract is

one0 hichis

created by la 0t is an obli$ation

)hich la) creates

in absence of ana$reement

28ample ;Trader lea'es the $oods at r (


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Based

pon

erfor"ance



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Classifications: Performance

Based on

Performance

28ecutory

Contract

6nilateral Bilateral

28ecuted

Contract


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-.ectory Contract

( contract in

)hich both the

partiesor any one party to the

contract has to

still perform their

shareof obli$ation

r ( entered into a contract )ith

the porter for liftin$ his 5 ba$sPorter a$reed to lift all the 5 ba$sfor TK !## (T present it is ane8ecutory contract since the porter has not lifted the ba$s and r (has not paid him

Based on

Performance

28ecutory

Contract

6nilateral

28ecutoryContract

Bilateral

28ecutoryContract

28ecuted

Contract


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-.ectory Contract

6nilateral

28ecutory Contract =here any one party to the

contract has to still perform

its share of obli$ation

Bilateral

28ecutory Contract =here both the

parties tothe contract has to still

perform their share of

obli$ation

Based on

Performance

28ecutory

Contract

6nilateral

28ecutoryContract

Bilateral28ecutoryContract

28ecuted

Contract


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-.ected Contract

; ( contract in )hich

both the

parties to ha'ethe

contractcompletely

performed

their

share of obli$ation

nothin$and

remains

done

by

tobe

either

of the parties

28ecutory

Contract

6nilateral

28ecutoryContract

Bilateral28ecutoryContract

28ecuted

Contract

28ample ;r ( entered into acontract )ith the porter for liftin$ his5 ba$s Porter a$reed and lifts allthe 5 ba$s for TK !## >ere theporter has lifted the ba$s and r (has paid him

Based onPerformance


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(""ary

Based on

Validity

• Voidable Contract

• Void ($reement

• Void Contract

• 0lle$al ($reements

• 6nenforceable

Contract

Based on

Formation• 28press Contract• 0mplied Contract

• 9uasi Contract

Based on

Performance

• 28ecutory Contract

• 28ecuted Contract

Contracts "ay be classified :

Documents

Class 6 Types of Contracts (1)