Types of Contract – Indian Contract Act,  1872

Section 2(e) of the Indian Contract Act, 1872 defines an agreement as “every promise and every set of promises forming consideration for each other”. An agreement which is enforceable by law is called a contract. The conditions of enforceability are provided in Section 10 of the Indian Contract Act, 1872.

According to this section, An Agreement is a contract when it is made for some consideration, between parties who are competent, with their free consent and for a lawful object.

There are many types of Contracts on a different basis.

I Types of Contract on the basis of its enforcement

  1. Valid Contract

An agreement enforceable by the law is a contract (Under Section 2(h)). To be enforceable it has to satisfy the condition of Section 10 of the Indian Contract, 1872. They are:-

  • There is some consideration for it.
  • The parties are competent to contract
  • Their consent is free.
  • Their object is lawful

2. Voidable Contract

Section 2(i) of the Indian Contract Act,1872 defines a 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, is a voidable contract.
Free consent which is defined in Section 14 of the Act is an essential element of a valid contract. Consent is free when it is not obtained by coercion[1], undue influence[2], fraud[3], misrepresentation[4] or mistake[5]. Where consent to an agreement is caused by coercion, undue influence, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so cause.

3. Void Contract

A void agreement is not enforceable at the option of either party. Section 2(g) of the Act explains the meaning of a void agreement.
Section 2(j) of the Indian Contract Act, 1872 deals with a valid contract which subsequently becomes void.  “A contract which ceases to be enforceable by the law becomes void when it ceases to be enforceable”.

No obligation or right arises from a void contract. They are not covered by under the law. Such contracts cannot be made valid by the parties to the contract by giving their consent.
Section 24-30 of the Indian Contract Act, 1872 deals with the Void Agreements . The types of Agreements are to be declared Void are as Follows

  • Agreement Unlawful in part (Section 24).
  • Agreement without Consideration (Section 25).
  • Agreement in restraint of Marriage (Section 26).
  • Agreement in restraint of Trade (Section 27).
  • Agreement in restraint of Legal Proceeding (Section 28).
  • Unmeaning Agreement (Section 29).
  • Wagering Agreement (Section 30).

Section 28 of the Act renders two kinds of agreement void. They are

  • An agreement by which a party is restrained absolutely from enforcing his legal rights arising under a contract by the usual legal proceedings in the ordinary tribunals.
  • An agreement which limits the time within which the contract rights may be enforced.

4. Unenforceable Contract

It is one which is good in substance, but because of some technical defect, one or both parties cannot be sued on it. These defect may be the absence of writing, registration, time-barred by the law of limitation, etc.

5.Illegal/Unlawful Contract

Section 23 of the Indian Contract  Act, 1872 deals with some condition when an agreement may be unlawful or illegal. A distinction has to be made between void contracts and illegal contacts. Agreements whose object or consideration is forbidden by law are called illegal contracts. In the case of void agreements, the law may merely say that if it is made, the courts will not enforce it.

Thus all illegal agreements or contracts are void, but all void agreements are not illegal. In the case of both illegal and void contracts, the similarity is that in either case, the primary agreement is unenforceable. Nothing can be recovered under either kind of agreement and if something has been paid, it cannot be recovered back. Thus a guilty party has no right of action on an illegal contract.


II Types of Contract on the basis of Mode of  Creation

1. Express Contract

The Section 9 of the Indian Contract Act,1872 deals with promises which are expressly made. Contracts arising from expressly made promises are called express contracts.

According to Section 9 “insofar as the proposal or acceptance of any promise is made in words, the promise is said to be express”. Thus contracts entered into between the parties by words, spoken or written, are known as express contracts.

2. Implied Contract

The Section 9 of the Indian Contact Act,1872 deals with implied contracts. It says “proposal or acceptance is made otherwise than in words, the promise is said to be implied.” Thus contracts entered into between parties by virtue of their conduct are called implied Contract.

The terms of the agreement are not expressed in written or oral form but are enforced from their conduct.

3. Quasi-Contract

A contract which does not arise by virtue of any agreement between the parties, but due to certain special circumstances, the law recognizes it as a contract. Such contracts come into existence because of interference from courts in the interest of justice.
There are many several situations in which law, as well as justice, require that a certain person is required to conform to an obligation, although he has neither broken any contract nor committed any tort. The principle is that there should not be “unjust enrichment” i.e., enrichment of one at the cost of another.

The Indian Contract Act does not define the term Quasi-contract. It does not mean that the principle behind the same hasn’t been recognized. Chapter V of the Act deals with such situations under the heading of “Of Certain Relations Resembling Those Created by Contract”.
They are constructive contracts imposed by law. This contract creates a right in personam which means that the right is available against a particular person not against the entire world. They are based on the principles of equity, good conscience and justice.

III Types of Contract on the basis of the extent of execution

1.Executed Contract

When both the parties have completely performed their respective obligations under the contract, it is said to be executed contract. It means that whatever was the object of the contract has been carried out. In most executed contracts the promises are made and then immediately contract.

2.Executory Contract

An executory contract is one which is one in which one or both parties are still to perform their obligations. Such controls are future contracts. In such contracts, the consideration is the promise of performance or obligation. In executory contracts, the consideration for the promise made is carried out sometime in the future.

3.Unilateral Contract

They are one-sided contracts. A unilateral promise is a promise from one side only and intended to induce some action by the other party. The promisee is not bound to act, for he gives no promise from his side. But if he carries out the act desired by the promisor, he can hold the promisor to his promise.

4.Bilateral Contract

A bilateral contract is a legally binding contract formed by the exchange of reciprocal promises. Here both parties are outstanding at the time of formation of the contract. In such a case, each party is a promisor and promise. They are also known as reciprocal contracts because mutuality of obligation is essential for their enforceability.


[1] Section 15 of Indian Contract Act, 1872.

[2] Section 16 of Indian Contract Act, 1872.

[3] Section 17 of Indian Contract Act, 1872.

[4] Section 18 of Indian Contract Act, 1872.

[5] Section 20 of Indian Contract Act, 1872.

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