Contracts are a vital and indispensable part of our daily lives. Every day we enter into various contracts knowingly or unknowingly; some in writing, others verbally, and a few by implication. The Indian Contract Act of 1872 governs all contracts in India, and it recognizes various types of contracts. In this article, we`ll discuss the different types of contracts that are recognized under the Indian Contract Act of 1872.
1. Express Contracts
An express contract is a contract in which the terms and conditions of the agreement are explicitly stated by both the parties. Express contracts can be either in writing or oral. In an express contract, both the parties have a clear understanding of what has been agreed upon.
2. Implied Contracts
An implied contract is a contract in which the terms and conditions of the agreement are not explicitly stated but are inferred from the conduct or behavior of the parties involved. For instance, you go to a salon for a haircut. Here, an implied contract comes into existence between you and the salon, where you agree to pay the price for the service provided.
3. Void Contracts
A void contract is a contract that is not enforceable by law. A void contract is deemed void ab initio (from the beginning). This means that it is a contract that is not valid from the outset. For instance, a contract entered into by a minor, persons of unsound mind, and those under coercion is void.
4. Voidable Contracts
A voidable contract is a contract that is enforceable by law, but one of the parties has the option to avoid the contract. A contract is voidable if it was entered into due to misrepresentation, fraud, coercion, undue influence, or mistake. The aggrieved party has the option of either rescinding the contract or seeking damages.
5. Unilateral Contracts
A unilateral contract is a contract in which only one party makes a promise, and the other party accepts it by performing the task. For example, a reward for finding a lost item is an example of a unilateral contract.
6. Bilateral Contracts
A bilateral contract is a contract in which both parties make a promise to each other. It can be either in the form of an express or implied contract.
7. Executed Contracts
An executed contract is a contract in which both parties have fulfilled their contractual obligations. For instance, you contract with a vendor to supply fruits. The vendor delivers the fruits, and you pay for it. Here, the contract is considered executed.
8. Executory Contracts
An executory contract is a contract in which one or both parties have not yet fulfilled their obligations under the contract. For instance, entering into a contract to buy a house is an example of an executory contract until the actual possession of the property is transferred.
In conclusion, the Indian Contract Act of 1872 recognizes various types of contracts. It is essential to understand the different types of contracts to ensure that your agreements are valid and enforceable. As a professional, it`s always a good practice to include the right keywords to make your article more discoverable to your target audience.