Kinds of Contracts according to Validity

Kinds of Contracts According to Validity

According to the validity of contracts, they are classified into 5 as discussed below.

1. Valid Contract: An agreement, which is enforceable at law, is said to be a valid contract. When all the essentials of a valid contract that are laid down in Sec. 10 of the Act are fulfilled, an agreement becomes a contract.

2. Void Contract: Void contract may be defined as, “a contract, which ceases to be enforceable by law, becomes void when it ceases to be enforceable. Act may be valid at the time when it was made, but later it may become void. Act with an alien friend becomes subsequently void when alien friend becomes alien enemy”.

3. Voidable Contract: It means, a voidable contract is one, which is enforceable at the option of one of the parties to contract. If the party does not get it enforced, he may rescind it. Such a contract remains valid unless the party at whose option it is enforceable does not rescind it. In other words, a voidable contract remains to be good till the party who is entitled to do so avoids it.

4. Unenforceable Contract: An unenforceable contract is one which cannot be enforced due to some technical defect such as absence of a proper stamp, absence of a written form, time barred etc. The parties may carry out such contracts. But in the event of breach or repudiation of the contract, the aggrieved party will not be entitled to any legal remedy.

5. Illegal Contract: An illegal contract is one which breaks some rule of basic public policy or which is criminal in nature or immoral. It is void ab initio. Thus a contract to commit dacoity is an illegal contract and cannot be enforced at law.

Related Post

Share the Knowledge: