Types of contracts

1.      Void contract – a contract ceases to be enforceable by law, becomes void – originally valid when entered into – by change of law, may subsequently become void – e.g. contract to deal with a foreign country will become void when war breaks out between the importing and exporting country.

Void agreement – agreement which does not create legal rights or obligations – a nullity – void ab initio – e.g. agreement without consideration.

2.      Voidable contract - enforceable at the option of one party and not the other – free consent is missing – party whose consent is not free may repudiate/ rescind/avoid/cancel the contract, if so elects – remains valid till it is repudiated.

Contract voidable also in following circumstances –

(i)     Prevent promisor to fulfil his part of promise – voidable at the option of promisor.

(ii)   Promisor fails to perform his part of obligation – voidable at the option of other party/promise.

3.      Illegal contract – which is against public policy, is criminal in nature, is immoral – collateral transaction/agreement also becomes illegal – all illegal agreements are void but all void agreements are not illegal. 

      Example: A enters into an agreement with B to manufacture prohibited goods – A takes loan for the purpose from C who knows about the purpose of the loan – agreement between A and C is collateral to the main agreement between A and B, which is illegal – collateral agreement is also illegal.

4.      Unenforceable contract – cannot be enforced in a Court of law due to technical defect  - may be carried out by the parties, but no legal remedies in case of breach by either party - e.g. non-registration, non-payment of stamp duty, etc makes the contract unenforceable.

5.      Express contract – terms agreed upon at the time of formation - may be written or oral.

6.      Implied contract – contract inferred from the act or conduct of the parties – proposal or acceptance made otherwise than by words – e.g. when a person gets into bus, lets a porter carry his luggage at the railway station, takes food at a restaurant, there is an implied contract.

Upton Rural District Council v Powell - P’s farm did not come under the free service zone of the fire department - fire at P’s farm – P called up Upton Fire Brigade which arrived and put out the fire – Held, P was liable to pay for the service rendered as implied promise to pay. 

7.      Quasi contract – resembles a contract – however, no express offer or acceptance - legal obligation on a party who is required to perform it –

Example : A leaves his goods at B’s place by mistake – B consumes the goods as his own – B is bound to pay for the goods to A as there was a quasi contract under which B was under a legal obligation to return A’s goods.

8.      Executed contract – both the parties have performed their respective obligations.

9.      Executory contract – may be partly or wholly executory – either or both parties have yet to fulfil his/their part of obligation.

10.  Unilateral contract – one-sided contract – one party has to fulfil his part of obligation – other party has already fulfilled his obligation before or at the time of formation of the contract – also known as contracts with executed consideration.

Example : A permits a porter to carry his luggage to the railway carriage – contracts comes into existence when the porter places the luggage in the carriage – at that time porter has already fulfilled his obligation – A yet to fulfil his obligation. 

Bilateral contract- both the parties have yet to fulfil their obligations – contract with Executory consideration.