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VALID CONTRACT & IT’S TYPE

Author : Rajat Maheshwari

Contract is an agreement between various parties which are framed and validated under Indian contract act.
According to Indian contract act 1872 contract is defined as an agreement enforceable by law.

Essential of contracts are-

  • There should be agreement between various parties. Parties doing agreement should be having free consent for doing contract which means same thing in the same sense
  • Parties having contract should be have capacity to enter into contract that means he or she should be attain age of maturity, he or she should be e of sound mind not disqualified from contracting.
  • While doing contract the object should be lawful if there will be unlawful object it will declared as void.
  • While doing contract parties must have consideration to do contract.

Types :

On the basis of validity

  • Void contract: which are not enforceable by law are void contract.
  • Valid Contract:  which are enforceable by law are valid contracts.
  • Voidable Contract: in which the consent of the party is not free, the contract becomes voidable, at the option of the aggrieved party.
  • Illegal Contract:  which is forbidden by law is termed as an illegal contract.
  • Unenforceable Contract: whose substance is good, but due to not fulfill all the essential conditions of contract, it is not enforceable, is called an unenforceable contract.

On the basis of formation

  • Express Contract: When the terms of the contract are expressed orally or in writing is known as an express contract.
  • Implied Contract: The contract which is constituted by implication of law or action, is an implied contract.
  • Quasi-Contract: These are not a real contract, but are identical to a contract, which is formed out of some circumstances.

On the basis of Performance

  • Executed Contract: When the contract is performed, it is known as an executed contract.
  • Executory Contract: When the obligation in a contract, is to be performed in future, it is described as an executory contract.
    • Unilateral Contract-promises done that are done from one party. (Lost and found reward)
    • Bilateral Contract- in this promises are done from both the parties.

Cases :

  1. Felt house v. Bindley

In this case Mr. Paul felt house wanted to purchase a horse from his nephew he offered to pay for the house was less than that his nephew was willing to sell it the position of horse was still in nephew uncle communicated through a letter to nephew by saying if I hear no more about horse then I consider it mine the nephew you did not respond to letter because of auction on his farm though do the nephew asked the auction her Mr. bindely  not to auction the horse but accidentally he did it now Mr. felthouse suit the defendant for conversion of his property as defendant argued that the horse was not actually Mr. felthouse  property. Because there is no contact existed between them at time of auction because of Mr. feldhaus offer was not accepted by his nephew and nephew silence cannot be considered to be an acceptance of the offer.

The court held at Mr. felthouse could not see you for conversion because at time of auction mister felthouse did not have ownership of the horse loafer made by Mr. felthouse was not actually accepted.

2. Mohori Bibee V/S Dharmodas Ghose

in this case the Dharmodas Ghose is a minor and sole owner of his property and his mother was appointed as legal guardian Dharmodas Ghose took a loan from a money lender through his agent Kedarnath the lender lend Dharmodas Ghose a sum of 20,000 at 12% per year the loan was taken by mortgaging the property papers at the same way that deal was made Dharmodas Ghose mother who is guardian notified that whosoever do agreement to the Dharmodas Ghose will be claiming money at his own risk and then Kedarnath claimed that Dharmodas Ghose has lied about his age on the date of execution of deed but it comes to untrue so.  Therefore court held that Brahmo Dutt that appeal was dismissed and his request for return of 10500 was also rejected as he was minor so agreement is void ab initio

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