Chapter - 2 Kinds of Contract

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Chapter II
Kinds of Contract
Kinds of Contract
Contract can be classified into the following five categories
1. 2. 3. 4. 5.
According to enforceability According to formation According to performance According to parties. Special kinds of contract
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Kinds of Contract According to enforceability
According to Enforceability
According to enforceability contract may be classified as follows
A.
Valid contract: it is the contract which fulfils all the essentials of valid contract. It is a contract which is binding and enforceable. Void contract: the expression void in its accurate sense means absolutely null that is to say, incapable of ratification or confirmation. It is the one to which the law will give no effect whatever. It is not a contract at all.
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B.
According to enforceability Contd

It cannot be enforced whatsoever. For example a contract by minors or unsound mind is void and unenforceable even if the minor were to ratify it after attaining majority. In a void contract no parties is legally bound to fulfill the contract. It is void by two ways, either from the beginning or becomes void subsequently due some reasons. i. From the beginning: also known as Ab-inition. (Abinitio is a Latin word, where ab means from and initio means beginning it means from the beginning or from first or start).

It is illegal from the moment it is made. Lack of capacity to contract automatically makes the contract void. Lack of capacity arises from being an infant or minor, intoxicated or insane or unsound minded. It may be known as void agreement or illegal contract. A contract becomes void ab-inition under the following circumstances.
1. Agreement in restrain from marriage. 2. Agreement in restrain of business 3. Agreement by way of wager 4. Uncertainty of terms 5. Un lawful object
6. Immorality 7. Fraudulent case 8. Agreement without consideration 9. Impossibility of performance 10. Agreement in restrain of legal proceedings

b) Subsequent illegality: A contract which ceases to be enforced by the law becomes void. It means that a void contract is not void from the beginning when it is made, but subsequently it becomes void due to some reasons.
i.
ii.
A agrees to sell his house to B after two days. The house is burnt next day. The contract becomes void. By death of any party to contract: F agrees to merry G. G dies before the marriage the contract is void.

iii. Due to changes in law or government policy: Kareem agrees to sell 1000 bags of wheat to Jamaal. Before the delivery the government bans private trade in wheat. The contract becomes void. iv. By rejection of voidable contract: A forcibly buys Bs car for 2000 Afs. The contract is voidable at the options of B. B may accept or reject it. If B rejects the contract it becomes void. v. It has been fully performed
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C. Voidable contract: it is an agreement that is
binding and enforceable but, because of the lack of one or more of the essentials of valid contract, it may be repudiated (rejected) by the aggrieved party at his option. It is voidable when consent of the one or more of the parties to it is not free. A voidable contract is valid until it is avoided by the party having right to avoid it. If the parties decide to confirm, it remains valid. A contract becomes voidable under the following circumstances
i. When consent of either party has been obtained by coercion, undue influence, misrepresentation or fraud.
Example: A compels B to sell his car at gunpoint. The contract is voidable at the option of B. Example: A deceives B stating that his factory produces 90 kg sugar daily and induces B to buy it. The contract is voidable.
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ii. When one party promises to do something for the other party but the other party prevents him from performing his promise, the contract becomes voidable at his promise.
Example: A contracts to paint B house. A is ready to paint but B prevents him to do so. The contract is voidable at the option A.
iii. When a party to the contract promises to do certain thing within specified time, but fails to do, the contract becomes voidable at the option of promise. If the time is the essence of contract.

Example: A contracts to paint Bs house within a week, A does not come within the specified time. The contract is voidable at the option of B. unenforceable contract is the one which is good in all other aspects but by the reason of some technical defect, it cannot be enforced until the defect is rectified. such as absence of writing, registration, requisite stamps etc. When these defects are removed the contract becomes enforceable.
D. Unenforceable
contract:
Kinds of Contract According to Formation
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Contract according to formation

According to formation contract can be classified into following categories
1. Express contract: It is the one which is expressed by the words spoken or written. When such a contract is formed, there is no difficulty in understanding the rights and obligations of the parties. In expressed contract the parties directly state the terms of the contract. Example: A tells on telephone to B that he wants to sell his car, and B informs A that he agrees to buy the car. It is expressed contract.
Contract according to formation contd

2. Implied contract: is the one which is made otherwise than by the words spoken or written. It arises from the acts, or conduct of the parties, course of dealings or circumstances. It arises when one person, without being requested to do so, renders services under circumstances indicating that he expects to be paid for them, and the other person knowing such circumstances accepts the benefit of those services. Examples: A went to restaurant and has a cup of tea. It is an implied contract and A will pay for the cup of tea. M a shoe shiner starts polishing the shoes of W in his presence and W allows him to do so. It is implied contract.
Kinds of Contract According to Performance
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Kinds according to performance

According to performance contract can be classified into following categories. 1. Executed contract: a contract is said to be an executed when both parties have completely performed their obligations. It means that nothing remains to be done by either party under the contract. Example: Sohail buys book form Mohib, Sohail pays the price and Mohib delivers the book. It is an executed contract. Jamshaid agrees to paint a picture for Noor, on 2000 Afs. When Jamshaid paints the picture and Noor pays the price, the contract is said to be executed.
Kinds according to performance

2. Executory contract: A contract is said to be executory when something remains to be done. It is a contract when both parties to the contract have yet to perform their obligations. Examples: Roshan sells his car to Sultan for Afs. 3 lac. Sultan has not yet paid the price and Roshan has not delivered the car. The contract between Roshan and Sultan is executor. Hadi agrees to teach Faisal, in May and Faisal agrees to pay Afs. 1000 to Hadi. It is an executor contract because both the promise has yet to be performed.
Kinds of Contract According to Parties
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According to parties.
On the basis of parties contract can be classified into following kinds. 1. Unilateral Contract: A contract is said to be unilateral when only one party makes commitment. In other words a contract where only one party is bound but the other party chooses to be bound by it. Example: Mujeeb promises to pay Afs. 2000 to anyone who finds this lost bag. Farishta finds the bag and returns. It is a unilateral contract which comes into existence when the bag is found.
According to parties contd ..

1. Bilateral contract: it is a contract where both parties are bound by it as soon as the contract is made. In other words both parties have yet to perform their obligations. Examples: Maria promises to paint a picture for Nargis, and Nargis promises to pay Afs. 20000 to Maria. It is bilateral contract.
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Special Kinds of Contract
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1. Quasi contract: In a Quasi contract, the law imposes certain obligations under some special circumstances. It is based upon the principle of equity that a person shall not be allowed to get benefit at the cost of another. In fact, it is not a contract but creates relations similar to contract. It is also called Constructive Contract. Examples: A finds lost property of B. A is bound to return it to B. Akram leaves his goods at Farhads house by mistake. Farhad treat them as his own, and uses them. It is Quasi contract Farhad is bound to pay for the goods.

2. Contingent Contract: an absolute contract is one in which the promises has to be performed independently of any contingency or condition. A contingent contract is the contract to do or not to do something, if some event, collateral to such contract, does or does not happen. Contingent contract must be must be dependent on future event, collateral to the contract and must be certain. Example : A Contracts to pay B Afs. 30000, if Bs house is burnt. This is a contingent contract. A contract of fire insurance is contingent. A wager is also contingent but forbidden by the law. Contingent contract is also known as conditional Contract, but technically there is distinction between the two.

Conditional Contract: is a contract in which performance of one party is conditional or dependent on the readiness or willingness to perform by the other party. In such contracts condition is a part of Performance itself, and is not uncertain, whereas in contingent , the event supposed to occur is not a part of performance but collateral to the contract, and is uncertain. Example : A agrees to deliver 200 bags of wheat to B only when B pays, is conditional on the performance of payment but not contingent, as payment is the part of performance and not uncertain.
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Sayyed Majid Pirkhel

Chapter - 2 Kinds of Contract

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Chapter - 2 Kinds of Contract

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LOGO

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Kinds of Contract According to enforceability

Kardan University Kabul

According to enforceability Contd

According to enforceability Contd

According to enforceability Contd

According to enforceability Contd

According to enforceability Contd

According to enforceability Contd

Kardan University Kabul

According to enforceability Contd

According to enforceability Contd

Kinds of Contract According to Formation

Kardan University Kabul

Contract according to formation

Contract according to formation contd

Kinds of Contract According to Performance

Kardan University Kabul

Kinds according to performance

Kinds according to performance

Kinds of Contract According to Parties

Kardan University Kabul

According to parties contd ..

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Special Kinds of Contract

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Contract according to formation contd

Contract according to formation contd

Contract according to formation contd

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