Different Types of Contracts in Law of Contracts
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Different Types of Contracts in Law of Contracts

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Different types of contracts in the law of contracts are based on the validity, formation and performance and all examples of the contract.

Generally, every person enters into the contract in his daily routine life, for example buying books, purchasing groceries or vegetables or purchasing property, etc. These are all examples of the contract. 

Types of Contract

Here, in this article, we will discuss the different types and kinds of contracts. The classification of contracts is based on the validity, formation, and performance of a contract. These are types of contract in business law are similar.

A] based on Validity

There are 5 types of contracts based on validity. 

  1. Valid Contracts
  2. Void Contracts
  3. Voidable Contracts
  4. Illegal / Unlawful Contracts
  5. Unenforceable Contracts

Let's discuss on by one;

1. Valid Contract

According to section 2 (h) of the Indian Contract Act, 1872. 'An agreement which is enforceable by law is called a contract.' And the conditions for the validity of the contracts are provided in section 10 of the Act.

Every agreement is a valid contract if it fulfils the following conditions as mentioned in section 10.

  1. There must be an agreement between two or more parties.
  2. The consent of parties must be free.
  3. The parties to the contract must be competent persons.
  4. The consideration must be adequate and lawful.
  5. The object of the contract must be lawful.
  6. The law should declare the contract as void.

We had already covered the topic of 'Meaning of Contract and Definitions'.

2. Void Contract or Void Agreement

What is a void contract? The definition of Void Contract has been provided in section 2 (g) of the Act, the void contract means 'An agreement which is not enforceable by law is void.'

This means all those contracts or agreements which are not enforceable and prohibited by the law to perform, such types of contracts are called Void Contract or Void Contract Meaning.

Examples of void contracts: A agrees to buy goods from B for a certain price in the next year. But meanwhile, B dies. There are no chances for the performance of a contract. Thus, the contract is not valid.

3. Voidable Contract

What is a voidable contract? The Voidable Contract is defined in section 2 (i) as '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'

The meaning of voidable contract means the contract that can be enforceable at the option of one party but not at the option of other parties.

Here, this type of contract may be either a valid contract or a void contract. Let's understand it through the example given below;

Examples of voidable contracts: X wants to buy a property (A) that belongs to Y, But Y is not willing to sell his property. But X forcefully buys it from Y and paid a certain amount to Y. Then, it is on the Y either accept this forceful transaction and make a contract valid or he can take defence for the contract is not valid.

Here, the consent of Y is not free when the contract is made forcefully but later he accepts. This type of situation in the contract makes the contract voidable.

There are some grounds for voidable contracts derived in sections 15 to 22. Click on the link given below to read more on Voidable Contracts

4. Illegal Contracts / Unlawful Contracts

Illegal contracts are those contracts in which either party or both breaks the law or performs certain actions which are prohibited by the law. Such contracts are void from the beginning (void-ab-initio). This is an illegal contract meaning.

Examples of illegal contracts: If A purchases smuggled goods from B. Then is an illegal contract.

5. Unenforceable Contracts

Unenforceable contract meaning means those contracts that cannot be enforceable by the law or court. In this contract, no action was taken against either party for their non-performance of the contract. Look at the example below you will better understand the meaning of unenforceable contract;

Unenforceable Contract Example: A agrees to sell his house for Rs.5,00,000/- to B which is located near the river. Meanwhile, there was a huge flood in the village and the house collapsed and was drawn into the river. Now, this contract can not be enforced against either party.

B] based on Formation

The contract can be divided into 4 types based on their formation;

  1. Express Contracts
  2. Implied Contracts
  3. E-Contracts
  4. Quasi-Contracts

1. Express Contracts

The definition of Express Contract, 'In so far as the proposal or acceptance of any promise is made in words, the promise is said to be express.'

Means, offer or acceptance to contract is given in oral words or written words are known as Express Contract.

2. Implied Contracts

The definition of an Implied Contract is, 'In so far as such proposal or acceptance is made otherwise than in words, the promise is said to be implied.'

Means, offer or acceptance to the contract is given other than oral or written words that are by the conduct of the parties then it is known as Implied Contracts.

3. E-Contracts

The e-contracts are the contracts that are not made either on paper or spoken. These types of contracts are made electronic in nature. 

Generally, these types of contracts are used for speedy entering into contracts that are far away from each other.

4. Quasi-Contracts

We have seen the essential elements for a valid contract and there is no contract without fulfilling those essential conditions. But, here is the one exceptional contract.

In quasi-contracts, there is nothing like offer-acceptance, consideration, the competence of persons and free consent. 

These contracts are not legal contracts but the courts consider them as relations resembling a contract and enforce them like a contract.

Example: A makes a contract with B to purchase fruits. A paid the amount and asked B to deliver the fruit the next day. B agrees with the same. But, mistakenly B delivers the fruits to X's house. And, X eats all the fruits. 

There is no contract between B and X, but the court will treat it as a quasi-contract and X has to pay the amount for the fruits.

C] based on Performance

Types of contracts based on their performance.

  1. Executed Contract
  2. Executory Contract

1. Executed Contract

Executed contracts are the contracts where the parties had completely performed their contractual obligations under the contract.

This means there is no obligation left on either party to perform the contract.

2. Executory Contract

Executory contracts are contracts where one or both parties are yet to perform the contractual obligations under the contract.

Example: A wants to buy a car from B for Rs. 10 Lacs to gift his wife. A paid amount to B but make one condition that the delivery of the car should be made on the next week. 

Here, A paid the full amount to B means A has completed his contractual obligations but B has yet to deliver the car to A. This is called an Executory Contract.

On this basis there are two types of executory contracts;

a) Unilateral Executory Contract

A unilateral executory contract is a one-sided contract. A unilateral promise could be a promise from one aspect solely and supposed to induce some action by the opposite party. The communicator isn't certain to act, for he provides no promise from his aspect. However, if he carries out the actions desired by the communicator, he will hold the communicator to his promise.

b) Bilateral Executory Contract

A contract could be a lawfully binding contract fashioned by the exchange of reciprocal guarantees. Here each party's area unit was outstanding at the time of formation of the contract. In such a case, every party could be a communicator and promise. they're additionally called reciprocal contracts.


Different types of contracts in law of contract are based upon the validity, performance, and formation of the contract.

Referred Books:

Akash is a YouTuber by Hobbie and Blogger by Passion. He Loves to spread information that helps others to live in this legal world.

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