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Types of Contracts:

Valid Contract:

An agreement which has all the essential elements of a contract is called a valid contract. A valid contract can be enforced by law.
E.g.: A agrees to sell his Honda CRV to B for Rs.10 Lakhs.

Voidable Contract [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 other or others, is a voidable contract. If the essential element of free consent is missing in a contract, the law confers right on the aggrieved party either to reject the contract or to accept it. However, the contract continues to be good and enforceable unless it is repudiated by the aggrieved party.

When the consent of a party is not free, the contract is voidable contract.
E.g.: A threatens B on gun point to sell his house to A for Rs.5 Lakhs.

Void Contract [Section 2(J)]:

A void contract is a contract which cases to be enforceable by law. A contract when originally entered into may be valid and binding on the parties. It may subsequently become void.
E.g.: A agrees to deliver certain chemical to B on 20th august. On 17th august, government declares sale/purchase of that chemical as illegal.

Points of Difference between Void and Voidable Contracts are as follows:

A contract which ceases to be enforceable by law becomes void when it cases to be enforceable. A voidable contract is a contract which a enforceable at the option of one party but not at the option of other party.

A void contract was valid when it was made. Subsequently it becomes unenforceable due to certain grounds such as subsequent impossibility, or subsequent illegality, A contingent contract is a contract which depends upon happening of an uncertain event. Event does not happen then the contract becomes void.
A voidable contract on the other hand is voidable at the option of the aggrieved party. It is called and continues to be valid until the contract is rescinded by the aggrieved party.

A contract which cases to be enforceable provides no legal remedy. But the aggrieved party in a voidable contract gets a right to rescind the contract. In case aggrieved party in a voidable contract opts not to rescind the contract within a reasonable time, the contract is and continues to be valid.


Void Agreement:
An agreement not enforceable by law is said to be void. Such agreement does not confer any right to any of the parties to it. The agreement, in such a case, is void-ab-initio. Such an agreement does not result in a contract at all.
E.g.: A agrees to sell 100 bags of cement to B at a certain price.

Illegal Agreement:

An agreement is illegal if it is forbidden by law; or is of such nature that, if permitted, would defeat the provisions of any law or is fraudulent; or involves or implies injury to a person or property of another, or court regards it as immoral or opposed to public policy. These agreements are punishable by law. These are void-ab-inito.
E.g.: A agrees with B to commit a dacoity.

All illegal agreements are void agreements but all void agreements are not illegal

Through there is similarity between an illegal and a void agreement. In either case the agreement is void and cannot enforce.


Yet the two differ from each other as illustrated below:

An illegal agreement is always void while a void agreements may not be illegal agreements may be void because its terms are not certain but such an agreement is not illegal.

Effect On Collateral Transaction:
An agreement is merely void. Then the collateral transaction to such agreement is enforceable. In case of illegal agreements, the collateral transaction to it is also void and cannot be enforced.

Unlike illegal agreements, there is no punishment to the parties in a void agreement.

Enforceability By Law:
Void agreement through not enforceable is not prohibited in law. While illegal agreement is forbidden by law.

Unenforceable Contracts:

Where a contract is good in substance but because of some technical defect cannot be enforced by law is called unenforceable contract. These contracts are neither void nor voidable.
E.g.: A transfers his house to B by sale deed which is not stamped.

Express Contract:

Where the terms of the contract are expressly agreed upon in words at the time of formation, the contract is said to be express contract.
E.g.: A calls B and proposes to purchase his car for Rs.1 Lakh. B gave his acceptance on the telephone.

Implied Contract:

Where a proposal or acceptance is made otherwise than in words, promise is said to be implied.

Tacit Contract:

A tacit contract is one which is inferred from the acts or conduct of the parties or from the circumstances of the cases.

In tacit contracts, terms and conditions of the contracts are known to the parties.
E.g.: Withdrawing case from an ATM., e.g.: A uses metro train to commute from CP to Dwarka Using metro card.

Quasi Contracts:

A quasi contract is created by law. Thus, quasi contracts are strictly not contract as there is no intention of parties to enter into a contract. It is legal obligation which is imposed on a party who is required to perform it. A quasi contract is based on the principle that a person shall not be allowed to enrich himself at the expense of another.
E.g.: Mr. a by mistake left his goods in B’s house and Mr. B consumes those goods. B will have to pay for those goods to Mr. A.

Executed Contract:

An executed contract is one in which all the parties have performed their respective obligation.
E.g.: A agrees to supply 100 Kgs of wheat for Rs.1500. A has delivered the wheat and B has made the payment.

Executory Contract:

An executory contract is one where one or both the parties to the contract have still to perform their obligations in future. Thus, a contract which is partially performed or wholly unperformed is termed as executory contracts. E.g.: A agrees to supply 100 Kgs of wheat for Rs.1500. A has delivered the wheat and but B is yet to pay Rs.1500.

Unilateral Contract:

A unilateral contract is one sided contract. A unilateral contract is one in which only one party makes an express promise, or undertakes a promise without first securing a reciprocal agreement from the other party. Unilateral contracts are also known as contracts with executed consideration. E.g.: A promises to pay B (his servant), a reward of Rs.1000 after B found his lost wallet. Here only Mr. A is required to perform his part of promise without securing any promise from Mr. B.

Bilateral Contract:

A bilateral contract is one in which both the parties are required to fulfill their obligations under a contract. Bilateral contracts are also known as contracts with executory consideration. E.g.: A promises to pay B a reward of Rs.1000, if he finds his lost wallet.

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