Classification of Contract.

(Basis of
formation)
1) Express contract. Entered in to by words which may be either spoken or written. the proposal and acceptance are made in words. 2) Implied contract. (Tacit contract). The proposal and acceptance made otherwise than in words. Made out of the surrounding circumstances and the conduct of the parties who made them. 3) Quasi contract. No intention on either side to make it a contract . The law itself creates legal rights and obligations against the parties. Based on equitable principles that a person will not be allowed to enrich himself unjustly at the expense of another.

Basis of performance
1)Executed contract.- if both parties of a contract performed their respective obligations. Executed means which is done.

2)Executory contract.-both the parties have not yet performed their obligations. a) Unilateral- a promise on one side is exchanged for an act on the other side. b) Bilateral a promise on one side is exchanged for a promise on the part of other party.

Basis of legal effects.

1)Valid contract.-agreements made by the free consent of the parties competent to contract for a lawful consideration with a lawful object not expressly declared to be void. 2)Void contract.- may be valid originally but becomes void on the happening of an event which makes it void. 3)voidable contract.- a) it is valid and binding on both the parties so long as it lasts. b) the law gives an option to one of the parties to avoid it if he so choses. c) The party entitled to repudiate the contract is not bound to repudiate it. 4)Unenforceable contract.-which cannot be enforced in a court of law because of some technical defects. 5)illegal contract.- agreement which is criminal in nature or which is immoral or which is against public policy.

Right in Personam
A right against or in respect of a person. Third parties do not come in between. Eg _ A owes some money to B. B is entitled to claim the money from A.

Right in Rem
A right against or in respect of a thing. Associated with conveyance or enjoyment of property. Eg:-A owns a plot adjacent to B.A has uninterrupted possession against B and the whole public.

Void
1. Cannot be enforced by any one of the parties 2. Void ab initio.

voidable
1. Void at the option of one of the parties. 2. Does not become void unless the party at whose option it is voidable repudiates it. 3. Consent of one of the parties is not free. 4. Defect is curable.

3. Does not satisfy sec.10 of ICA

4.

Defect is incurable.

Consensus ad idem
The parties to a contract must agree upon the subject matter of contract in the same manner and same sense. Eg- A owns 2 cars Alto & Maruti. Offers to sell B one car intending it to be Maruti. B accepts the offer thinking it to be Alto. There is no consensus and hence no contract.

Ex turpi causa, non oritor actio

Out of illegal agreement no cause of action arises. All illegal agreements are void. Parties to illegal agreements may be liable for punishment.

Characteristics of valid offer

1. 2. 3. Terms of offer must be clear and certain. Offer must be communicated to the offeree. An offer must be made with an intention to create legal obligation. 4. Invitation to an offer is not an offer. 5. Special terms attached to an offer must be communicated. 6. An offer may be to an individual or to the public at large. 7. Offer may be express or implied. 8. Offer must be made with a view to obtaining the assent of the other party. 9. Offer may be conditional. 10. Offer should not contain a term ,the non compliance of which would amount to acceptance.

Different kinds of offers

1. General.-addressed to an unascertained body of individuals. 2. Specific.-addressed to an individual or body of individuals. 3. Standing.-offer for continuous supply of a certain article at a certain rate over a definite period. 4. Counter.-rejecting the original offer and making a new offer. 5. Cross.-two parties make identical offer to each other in ignorance of each others. No acceptance and hence not contract 6. Invitation to offer.-offer to negotiate.

Carlil V.Carbolic smoke ball company.

General offer. Lalmansukla V.Gauridutt. Offer must be communicated. Felthouse V. Bindlee. Silence cannot be prescribed as a mode of acceptance.

Revocation (offer comes to an end) section 6 of ICA

1. 2. 3. 4. 5. 6. Revocation by communication of notice. By lapse of prescribed time. Death of the Offeror. Insanity of the offeror. Non-fulfillment of conditions. Offer not accepted according to the mode prescribed. 7. Rejection by a counter offer.

Essentials of valid acceptance

1. Acceptance must be absolute . 2. Acceptance must be communicated to the offeror. 3. Made within a reasonable time. 4. Communicated in some usual and reasonable manner. 5. May be express or implied. 6. Made by the offeree. 7. Made only after the offer is made. 8. Must be given before the offer lapses or is revoked. 9. Concludes the contract. 10. Acceptor must be aware of the proposal at the

Modes of acceptance
1. 2. 3. 4. 5. By mere assent. By mere promise. By act or conduct. By signing a document. By signing papers containing terms.

Dunlop V. Higgins.
Acceptor is not responsible for the delay in the course of transit. When the letter of acceptance is posted acceptance is complete on the prt of the acceptor.