What is the meaning of contract? Let's start the definition of contract. So, contract is discussed in Indian Contract Act 1872 under section 2, subsection H where it is said that the term contract is defined as an agreement enforceable by law. An agreement which is enforceable by law.
So, on analyzing the definition we find that contract consists of two essential elements. We have seen two things in this definition. One is agreement and an agreement.
Second is what? Enforceability by law. If we see according to the Contract Act, Section 2, Subsection H, then contract means simple, an agreement which is enforceable by law. But what are agreement and enforceability by law?
We have to see first what agreement means. So what is agreement? According to Indian Contract Act, So, under section 2, subsection E of the Indian Contract Act 1872, agreement means the term agreement is defined as every promise and every set of promises forming the consideration for each.
other means that is an agreement what is agreement a promise a set of promises consideration means in return means in return service, money, in kind, anything that is consideration so now what is promise according to section 2 subsection b promise means When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. Proposal when accepted becomes a promise. Now, you have seen that in contract agreement and enforceability is important.
Agreement means what? That promise is important. Promise is a set of promises which is being considered.
Now, what does promise mean? Promise means that the act is being done according to the promise. promise means when a person is making a promise and the other person accepts the proposal then what happens there?
promise now what does it mean? an agreement is the result of proposal made by one party to the other party and that other party gives his acceptance there too agreement means what? that a party has made a proposal So, if we say in short, agreement means what? Offer or proposal plus acceptance. That is agreement.
Now, so, let's see what is contract. Contract is an agreement which is enforceable by law. Now, what is agreement?
Agreement is a set of promises which are for consideration. Okay. Then what happened to promise?
Promise was a proposal and its acceptance. That is promise. So agreement in conclusion what happened?
Proposal happened and proposal was accepted. We gave offer but agreement will not happen until that offer is accepted. Only offer will not happen.
With offer acceptance is important. As soon as offer and acceptance both happened, it converts to agreement. So in full sense.
What is enforceability by law? We have seen the agreement. Enforceable means able to be imposed, can be executed, can be abide by law. Enforceable means the law that is being executed. So that the law is legal.
If I have simply explained to you, So let's say that to make a contract, our agreement is important. An agreement with the agreement that is considered law, that yes, it is valid. Now see how.
Suppose there is a person and the person said to the other person, that if you shoot C then I will give you 50 lakh rupees. See now here the offer has been made. The other party has accepted the offer. Means B has accepted. B said okay done.
Now I will shoot C for 50,000 rupees. Now here offer was made, promise was made. Consideration also made 50,000 rupees.
And acceptance also made. Means what? Agreement done.
Offer was accepted. As soon as offer is accepted, agreement is made. Okay. But what happened now?
B doesn't shoot C. It is not ready. So what happened now? He is breaking the agreement. So can we go to court and say that they have promised us or they have made an agreement with us and they are not completing it.
They talked to shoot and they are not shooting. No, we can't say this at all because it is illegal. Means what?
That along with having an agreement, it is also necessary to be legal. Means such a thing that you can take it to court. That court is accepting that this thing is valid. So that is called enforceable. by law so an agreement to become a contract must give a rise to a legal obligation which means a duty enforceable by law.
Law ke dara enforceable ho na must hai tabi wo agreement contract mein convert ho ga. Does it can be concluded that contract means what? Accepted proposal proposal that is an agreement. Agreement means offer dena plus acceptance lena.
To agreement ho gaya plus enforceability by law. Then what will be your contract? Now, there is a notation.
All contracts are agreements but all agreements need not be a contract. Means what? All contracts will be agreements but all agreements are not necessary to be contracts.
Why? Because to be a contract, agreement must be there. An agreement which is logitimized, enforceable, But all agreements are not enforceable.
Like I gave you an example of a shoot case. So can they be a contract? No. That's why all contracts are agreements.
But all agreements need not be a contract. Apart from this, there are some rules. Like in case of domestic, social and political agreement.
If there is a domestic, social and political agreement. Then law presumes that parties did not have any intention to create a legal relation. Means what?
That if there is a domestic or social or political case and there is an agreement being made. Agreement in the sense what? That a proposal or offer is being given there and that offer is also being accepted.
So there the law presumes that the parties involved in the offer and acceptance had no meaning in creating a legal relation. At this point, there is a very famous case Balfour v. Balfour. What was the case of Balfour v. Balfour?
What was the case of Balfour v. Balfour? husband going foreign promise foreign and promised to pay monthly allowance but refused to pay after to his wife means what? that there is a husband who is going on a foreign trip and at that time he promises his wife that after going foreign every month he will pay some remuneration means he will keep sending some money but at last what happens is that after going foreign he does not pay money so wife does a case in this case the decision of law is that the husband who is going to go abroad and the wife who is going to go abroad domestic agreement or social or political agreement is not called contract. It is not in the condition of contract.
It is in general. It is done because of affection, love and all. In that case, we will not consider it as a contract.
When we do not consider it as a contract, we will not consider it as enforceable by law. So what happened in that case was that the case of wife was refused. On the grounds that it is not enforceable by law.
It is not a valid contract. It is just an agreement. And agreement is not enforceable by law.
It is not necessary. Like our statement. Second case is more. If case is of commercial agreement.
Then law presumes that. All parties have intention. That they create legal relation.
Like. A agrees to sell a scooter. At Rs. 50,000 to B.
On 15th Feb 2020. Now what happened here. It again. Agree means offer has been accepted B will sell the scooter for 50,000 Now it's an agreement Agreement is enforceable by law So it's a contract I hope you understood What is a contract, agreement, enforceable by law What are social political agreements What is law in commercial agreements It's all over about contract To divide a contract basis on the basis of which the contract is divided. So the first basis is on the basis of creation or formation.
On the basis of creation or formation, what types of contracts can be made? One is express contract, second is implied contract, third is your cause contract and last is e-contract. The second basis that is mentioned is the basis of enforceability.
So, what is the basis of enforceability? What are the types of contracts on the basis of enforceability? One is valid, one is void, voidable. illegal and unenforceable.
Apart from this, on the basis of execution or performance, the contract is divided. According to this, the contract is of two types. One is executed and the other is executory.
And the last basis is on the basis of obligation. On the basis of obligation, the contract is divided. Which is unilateral contract and bilateral contract. So you saw that there are mainly 4 bases on which contract is divided or types of contract are there. So on the basis of creation, excess is not implied cause.
On the basis of enforceability, valid, void, veritable, illegal and enforceable. On the basis of execution, executed, executory. And on the basis of obligation, unilateral and bilateral. So now what we will do is, we will understand the types of each base one by one. So first of all, let's start.
on the basis of creation or formation. So on the basis of creation or formation, first is express contract. What is express contract? Proposal or acceptance of any promise is made in words, written or spoken. What is express contract?
Whatever acceptance or proposal or offer has been made, that promise is being made that we will do this contract, that is expressed in words. That is expressed in words. It is clearly told that we are involved in this contract. whether it is done orally or in writing agreement Second is Implied Contract Implied contract is when proposal or acceptance is made otherwise than words Implied means you know it is contract So there proposal or acceptance is done without words It is not happening through any word. Here it is not decided expressly that we are involved in this contract.
It is implied that we are involved in this contract. Suppose you are at the railway station and you get off the train and a coolie comes and picks up your luggage. In that case, the coolie picks up the luggage and when he drops you, you understood that if the coolie has picked up your luggage, then you have to pay.
This is an implied contract. Your contract became a situation-according contract. If you don't want to be involved in this contract, you will refuse the coolly.
No, no, you don't pick up our luggage. But otherwise, he picked up the luggage, so you understood that you are bound in a contract. Now on the basis of his performance, you also have to pay something in return in consideration, which you give him money. So that is implied contract, no need to say anything. In the same way, you see the cobbler.
If you keep your shoes, then the cobbler understood that he has to make the shoes. Similarly, as soon as the cobbler made shoes, you know that you have to make a payment. So, what do we call such a contract? Implied contract. Okay, third is what?
Causal contract. What is a causal contract? A causal contract is not an actual contract, but it resembles a contract. It is not actually a contract, but it resembles. It is assumed that it is a contract.
It is a contract in which there is no intention on part of either party to make a contract, but law imposes a contract upon the parties. The parties involved here have no intention of doing any contract but they get bind in the contract through law. How? This situation arises in the case of lost goods. Suppose you got a lost item.
In that case, now your responsibility has become to return the lost goods. If you find that person that yes, these goods are mine and he has proof that these goods are his, then it is your responsibility to return it. So what will happen is that this law is imposed that now you have to pay the contract that he asked for. So this is the law's imposes. You never had any intention.
So, the cause and the contract works on a maxim that is no one can be rich by any other losses. It is not like that if someone is in loss and you become rich. You never have any intention.
If you are getting rich because of someone's loss, then you should pick the money. You should pick the money and return it. This type of contract is called a quasi contract. Last is what?
E-contract E-contract is when a contract is entered into by two or more parties using electronic means such as e-commerce such as email is known as e-commerce contract in electronic commerce different parties or person create a network which are linked to other network through edi electronic data interchange a simple thing i will frame in your mind like you are shopping online so this type of thing as soon as you choose your product in cart for shopping and you place the order then you get involved in the contract now what happens to the other party that they deliver the product to you and you pay for it whatever payment option you choose if cash on delivery then you pay for it and if before then you pay for it so that kind of contract is called e-contract right this helps is doing business transaction using electronic mode there are known as ADI Contracts, Cyber Contracts, Mouse Click Contracts We call it ADI Contracts, Cyber Contracts, Mouse Click Contracts Because we are doing order place with mouse click These are called E-Contracts Where we are doing online contracts So these are the four on the basis of creation or formation Next is what on the basis of enforceability What is enforceable? through enforceable law. You can do court case, you can go to court.
So, what type of contract are there on the basis of that? So, first is valid contract. An agreement which is binding and enforceable is a valid contract.
It contains all the essential elements of a valid contract. We know valid contract very well. We have seen in its prior videos that what are the essential elements by which a valid contract is framed under section 10. We have already discussed this. So valid means when all the elements are there to contract, that under section 10 which is told, free consent, consideration, lawful object, if all those things are there, then what do we call that contract? Valid contract.
Means here both parties can go to court. It is enforceable by law. That is valid contract.
Next is what? Void contract. Void contract is what? Contract which cannot be enforceable by a court of Law, it cannot be enforced by the court of law.
It cannot be done there. This actually happens when impossibility of performance is there. For example, let's assume that A and B were two parties and a contract was made between A and B.
A said that I will transfer this raw material to you on this date. Or let's assume that I will transfer this property to you. I will transfer this date to you.
Okay fine. A owner was. Now before transferring the property. A died.
Before transferring the raw material. A died. So now that contract is void. Because party is not there.
Party died. So impossibility of performance. How will performance happen?
So that type of contract is what we call void contract. Where we can't take it to court. Because performance did not happen. Before performance date.
Before performance date. The agreement is impossible. So that is void contract.
Next is voidable contract. An agreement which is enforceable by law at the option of one or more parties. But not at the option of the other or otherwise.
Others is a voidable contract. What does voidable contract mean? When an agreement is being made which is enforceable by law.
But enforceable by law is not for both parties. Because we know that to be a contract, two parties have to... Compulsory means giving an offer or acceptance So here what happened is For one party it is enforceable by law But for other party it is not enforceable by law That type of contract is called voidable contract Now for example let's take free consent Free consent you must remember we had discussed Free consent means no cohesion, misrepresentation, mistake, and no influence Now suppose A and B are involved in two contracts Okay Here A is getting a contract from B and B is telling him to complete this work. So he is influencing undue, he is putting his undue pressures on someone's political or I will say he is cohesion.
He is threatening him and getting him ready to contract with him. And B completes that contract. So in that case B is an aggrieved party because he is getting a contract completed by threatening him.
So, for B, it was enforceable by law. B can go to court and file a court case against him. But, it was not enforceable by law for A. Why?
Because A is doing a lot of scaring. A is coercing him, under influence, to do the contract. So, it was not enforceable by law for A.
But, for other party, B, which is a grift party, it was enforceable by law. So, this type of contract is called voidable contract. That is, void ab initio.
This is voidable contract. Means for one party it is enforceable by law but not for other party. That is voidable contract. Last is what? Illegal contract.
And illegal agreements are void but all void agreements are not necessarily illegal. Illegal contract means where object is illegal. The purpose for which contract is being done is illegal.
Like just say human trafficking ke liye contract kiya ja raha hai, contract kiya gaya murder karne ke liye, contract kiya ja raha hai kisi ko kidnap karne ke liye, toh yahaan pe jo object is, object ki liye contract ho raha hai, wo object illegal hai, forbidden by law hai, matlab law se specifically mana kar rakhi ki ista ka kaam nahi karna chahiye, aur tab aap uschis ki contract me involve ho raha hai, toh ye saare ki saare illegal hota hai, par yad rukhne wali baat kya hai, ki all illegal agreements are void, jitane bhi illegal agreements honge, matlab jiska object hi illegal hoga, Object forbidden by law and for that there will be an agreement or contract So all those will be void, we can't enforceable by law There will be no performance But we can't call all void agreements illegal When will void agreement happen? When there is impossibility of performance So impossibility of performance like death case So we will not call it illegal, when contract was there, it was legal But because of sudden event or sudden event, something happens due to which possibility So, it is not compulsory that every void agreement is illegal. But every illegal agreement is void. This is confirmed.
Because every illegal agreement has that performance will not happen. So, it will be void. So, this is done on the basis of enforceability. Last is unenforceable contract.
Where a contract is good in substance. That means the contract is right in some way. But because of some technical defect that is absence in writing, bad by limitation etc. One or both the parties cannot sue upon it.
It is described as unforeseeable contract. Where everything was fine, contract was going fine. But the agreement is not there.
There is some technical defect in it. Sign is not done, date is not mentioned. Or he is not clearing the correct object in writing. Means there is something due to which both parties cannot sue each other.
Means they cannot court case. They cannot court case. So this is unenforceable by law Means due to technical error you cannot go to court So in that case that is unenforceable contract So on the basis of enforceability there are 5 types of contract Now let's see on the basis of execution On the basis of performance First is executed contract If the consideration for a promise What is?
If the consideration for the promise in a contract That is any Act or forbearance is given or executed such type of contract is called contract with executed consideration. Means what has happened is that here whatever is the promise for the contract or whatever consideration or agreement has been decided, what has happened is that it has been completed, they do it, performance is done. That is executed contract. Suppose you go to a grocery shop and purchase sugar from there, they gave sugar and you have paid them, contract done.
That is executed contract. Both parties have done their performance. That is executed contract.
Second is what? Executory contract. Consideration is to be performed in future. What happened here?
Consideration is also not confirmed. Consideration payoff is not there. Suppose, let's say that there is a student.
He has contracted for his tuition with B. B talks to B that you make us do tuition. We have to take tuition classes from you.
So, in that case, what happened? A has paid him and the teacher has taken the class. Now A will pay him.
So he has paid the tuition and the classes will go on. So here one is done and the second consideration is left. So that is executory contract.
Suppose the student has paid and the tuition master has to take classes next month. So what will happen here? Executory. Consideration.
is still remaining means one is performing so this is called executory contract performance in future on the basis of obligation one is unilateral other is bilateral unilateral contract is one sided contract in which only one party has to perform his promise or obligation to do or forbear here performance is one sided suppose for example A said that whoever finds this boy will pay 50,000 Now here he has completed his site's work that he will pay 50,000 Now the second party whoever finds him then that contract will be completed So Unilateral, one side party has already given performance means one side party has completed the work A said that I will pay 50,000 as I found Missing Boa. She completed her work. Now whoever found it, he has to pay 50,000. That is a one-sided contract. Now we can't decide the second party, it can be anyone, whoever finds it will be.
Bilateral contract where the obligation or promise in a contract is outstanding on the part of both the parties. It is known as bilateral contract where the obligation or promise of both the parties is outstanding. Both the parties have to perform, that is bilateral contract. For example, let's see that suppose A and B were there, so A sold his plot to B. So when he made an agreement to sell B, B paid him 25,000.
Now B said that the date on which you will transfer the title rate, we will transfer the remaining amount. So both the dates are in contract but both the dates are not yet confirmed. The date on which he will transfer the title rate, he will transfer the remaining amount.
So that is bilateral contract. So I hope you have understood what types of contracts are there and on what basis we divide them. So wish you all the best.