PART ONE-GENERAL PRINCIPLES OF LAW OF CONTRACT

CHAPTER

1 Nature of Contract

CHAPTER CONTENTS
O Object of the law of contract
The Indian Contract Act, 1872
Essential Elements Of A Valid Contract
Classification of Contracts
.
Classification according to validity
. Classification according to formation
Classification accordingto performance
OClassification of Contracts in English Law
Summary
Objective Type Questions
OTest Questions
Practical Problems
OBJECT OF THE LAW OF CONTRACT
The law of contract is that branch of law which determines the circumstances in which
promises made by the parties to a contract shall be legally binding on them. Its rules define the
remedies that are available in a court of law against a person who fails to perform his contract, and
the conditions under which the remedies are available. It is the most important branch of business
law. Jt affects all of us in one way or the other. It is, however, of particular importance to people
engaged in trade. commerce and industry as bulk of their business transactions are based on
contracts.
The law of contract introduces detiniteness in business transactions. Sir William Anson observes
in this connection that the law of contract is intended to ensure that what a man has been led to
expect sliall come to pass, and that what has been promised to him shall be performed. In simple
6 GENERAL PRINCIPLES OF LAW OF CONTRACT

words, it may be said that the purpose of the law of contract is to ensure the realisation of
reasonable expectation of the parties who enter into a contract.

THE INDIAN CONTRACT ACT, 18772

The law relating to contracts is contained in the Indian Contract Act, 1872. The Act deals with
(1) the general principles of the law of contract (Secs. I to 75), and (2) some special contracts only
(Secs. 124 to 238). The first six chapters of the Act (which embody the general principles) deal with
the different stages in the formation of a contract, its essential elements, its performance or breach
and the remedies for breach of contract. The remaining chapters deal with some of the special
contracts, viz., indemnity and guarantee [Chapter VIll (Secs. 124 to 147), bailment and pledge
IChapter IX (Secs. 148 to 181)], and agency [Chapter X (Secs. 182 to 238)].
The Act does not affect any usage or custom of trade. (Sec. 1, para 1).
The references to Sections in Chapters 1 to 12 are to the Indian Contract Act, 1872, unless
otherwise stated.

The Act is not exhaustive

The Indian Contract Act does not profess to be a complete and exhaustive code. It deals with
the general principles of the law of contract and with some special contracts only. Some of the
contracts not dealt with by the Act are those relating to partnership, sale of goods, negotiable
instruments, insurance, bill of lading, etc. There are separate Acts which deal with these contracts.

Nature of the law of contract

The law of contract differs from other branches of law in an important respect. It does not lay
number of rights and duties which the law will enforce; it consists rather of a number of
limiting principles, subject to which; the parties may create rights and duties for themselves which
the law will uphold. The parties to a contract, in a sense, make the law for themselves. So long as
they do not infringe some legal prohibition, they can make what rules they like in respect ot the
subject-matter of their agreement, and the law will give effect to their decisions [The English Law of
Contract by Anson, 22nd ed. 1964, p. 3].

Law of contract is not the whole law of agreements nor the whole law
of obligations
There are several agreements which do not give rise to legal obligations. They are, therefore,
not contracts. Similarly, there are certain obligations which do not necessarily spring from an
agreement, e.g., (i) torts or civil wrongs, (i) quasi-contracts, (iii) judgments of Courts. These
obligations are not contractual in nature. But even then they are enforceable.
Salmond has rightly observed that the law of contract is "not the whole law of agreements, nor
it is the whole law of obligations. It is the law of those agreements which create obligations, and
those obligations which have their sources in agreements." It excludes from its purview all
obligations which are not contractual in nature and agreements which are social in nature.
NATURE OF CONTRACT

Low of contract ereates jus in personam as distinguished from jus in rem

Jus in rem means a right against or in respect of a thing; jus in personam means a right
against or in respect of a specific person. A Jus in rem is available against the world at large; a jus
in personam is available only against particular persons.
Examples. (a) A owes a certain sum of money to B. B has a right to recover this amount
from A. This right can be exercised only by B and by none else against A. This right of B is a
jus in personam.
(b) X is the owner of a plot of land. He has a right to have quiet possession and enjoyment
of that land against every member of the public. Similarly every member of the public is under
an obligation not to disturb X's possession or enjoyment. This right of X is a jus in rem.

DEFINITION OF CONTRACT
A contract is an agreement made between two or more p¡rties which the law will enforce. Sec.
2 (h) defines contract as an agreement enforciable by law This definition is based on Pollock's
definition which is as follows: "Every agreement and promise entorceable at law is a contract.

Sir William Anson defines a' contract as "a legally binding agreement between two or more
persons by which rights are acquired by one or more to acts or forbearances (abstaining from doing
something) on the part of the others."
According to Salmond, a contract is "an agreement creating and defining obligations between
the parties.
Agreement and its enforceability. If we analyse the definitions of contract we find that a
contract essentially consists of two elements, viz., (1) agreement, and (2) its enforceability by law.

agreement is defined as "every promise and every set of promises, forming consideration for
each other (Sec. 2 (e)l. A promise is defined thus: "When the person to whom the proposal is made
signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted,
becomes a promise" Sec. 2 (6). This, in other words, means that an agreement is an accepted
proposal. In order, therefore, to form an agreement, there 'must be a proposal or offer by one party
and its acceptance by the other. To sum up:
Agreement = Offer + Acceptance.

Consensus ad idem
The essence of an agreement is the meeting of the minds of the parties in full and final
agreement; there must, in fact, be consensus ad idem. The expression agreement' as defined in
Sec. 2 (e) is essentially and exclusively consensual in nature (Sunnam Sattiah v. State, A.l.R. (1980)
A.P. 16], ie., before there can be an agreement between two parties, there must be consensus ad
idem. This means that the parties to the agreement must have agreed about the subject-matter of
the agreement in the same sense and at the same time. Unless there is consensus ad idem, there
can be no contract.
Example. A, who owns two horses named Rajhans and Hansraj, is selling horse Rajhans
to B. B thinks he is purchasing horse Hansraj. There is no consensus ad idem and
consequently no contract.
 8 GENERAL PRINCIPLES OF LAW OF
CONTRACT

In order to determine whether, in any given agreement, there is existence of consensus ad

idem, it is usual to enmploy the language of offer and acceptance. Thus if A says to B, "Will you
purchase my blue car for Rs. 10,000?" and B says "yes" to it, there is consensus ad idem and an
agreement comes into existence

Obligation
An agreement, to become a contract, must give rise to a legal obligation or duty. The term
'obligation' is defined as a legal tie which imposes upon a definite person or persons the necesity of
doing or abstaining from doing a definite act or acts. It may relate to social or legal matters. An
agreement which gives rise to a social obligation is not a contract. It must give rise to a legal
obligation in order. to become a contract.
Examples. (a) A agrees to sell his car to B for Rs. 50,000. The agreement gives rise to an
obligation on the part of A to deliver the car to B and on the part of B to pay Rs. 50,000 to A.
This agreement is a contract.

(b) A promises to sell his car to B for Rs. 50,000 received by him as the price of the car.
The agreement gives rise to an obligation on the part of A to deliver the car to B. This agrement
is also a contract.

Agreement is a very wide term

An agreement may be a social agreement or a legal agreement. If A invites B to a dinner and B
accepts the invitation, it is a social agreenent. A social agreement does not give rise to contractual
obligations and is not enforceable in a Court of law. It is only those agreements which are
enforceable in a Court of law which are contracts.
Examples. (a) A invites his friend B to come and stay with him for a week. B accepts the
invitation but when he comes to A, A cannot accommodate him as his wife had died the day
before. B cannot claim any compensation from A as the agreement is a social one.
(b) A father promises to pay his son Rs. 100 every month as pocket allowance. Later he
refuses to pay. The son cannot recover as it is a domestic agrement and there is no intention
on the part of the parties to create legal relations.
To conclude: Contract= Agreement + Enforceability at law.
Thus all contracts are agreements but all agreements are not necessarily contracts.

ESSENTIAL ELEMENTS OF A VALID CONTRACT

According to Sec. 10, all agreements are contracts if they are made by the free consent of
parties competent to contract, for a lawful consideration and with a lawful object and are not
expressly declared to be void. In order to become a contract, an agreement must have the following
essential elements:
1. Offer and acceptance. There must be two parties to an agreement, i.e., one party making
the offer and other party accepting it. The terms of the offer must be definite and the acceptance of
the offer must be absolute and unconditional. The acceptance must also be according to the mode
prescribed and must be communicated to the offeror.
2. Intention to create legal relationship. When the two parties enter into an agreement,
their intention must be to create legal relationship between them. If there is no such intention on the
NATURE OF CONTRACT 9

part of the parties, there is no contract between them. Agreements of a social or domestic nature do
not contemplate legal relationship, as such they are not contracts.
Example. A husband promised to pay his wife a household allowance of £30 every
month. Later the parties separated and th husband failed to pay the amount. The wife sued for
the allowance. Held, agreements such as these were outside the realm of contract altogether
Balfour v. Balfour, (1919) 2 K.B. 571].
In commercial and business agreements, the presumption is usually that the parties intended to
create legal relations. But this presumption is rebuttable which means that it must be shown that the
parties did not intend to be legally bound.
Examples. (a) There was an agreement between R Company and C Company by means
of which the former was appointed as the agent of the latter. One clause in the agreement was
This agreement is not entered into....as a formal or legal agreement, and shall not be subject
to legal jurisdiction in the law courts." Held, there was no binding contract as there was no
intention to create legal relationship IRose & Frank Co. v. Corruption Bros. (1925) A.C. 445.
(b) In an agreement, a document contained a condition "that it shall not be attended by or
give rise to any legal relationship, rights, duties, consequences whatsoever or be legally
enforceable or be the subject of litigation, but all such arrangements, agreements and
transactions are binding in honour only." Held, the condition was valid and the agreement was
not binding (Jones v. Vemon's Pools. Ltd. (1938) 2.
3. Lawful consideration. An agreement to be enforceable by law must be supported by
consideration. Consideration' means an advantage or benefit moving from one party to the other. It
is the essence of a bargain. In simple words, it means 'something in return'. The agreement is
legally enforceable only when both the parties give something and get something in return. A
promise to do something, getting nothing in return is usually not enforceable by law. Consideration
need not necessarily be in cash or kind. It may be an act or abstinence (abstaining from doing
something) or promise to do or not to do something. It may be past, present or future. But it must
be real and lawful [Secs. 2 (d), 23 and 25).
4. Capacity of parties-competency. The parties to the agreement must be capable of
entering into a valid contract. Every person is competent to contract if he (a) is of the age of
majority, (6) is of sound mind, and (c) is not disqualified from contracting by any law to which he is
subject(Secs. 11 and 12). Flaw in capacity to contract may arise from minority, lunacy, idiocy
drunkenness, etc., and status. If a party suffers from any flaw in capacity, the agreement is not
enforceable except in some special cases.
5. Free and genuine consent. It is essential to the creation of every contract that there must
be free and genuine consent of the parties to the agreement. The consent of the parties is said to be
free when they are of the same mind on all the material terms of the contract. The parties are said
to be of the same mind when theyagree about the subject-matter of the contract in the same sense
and at the same time (Sec. 13). There is absence of frea consent if the agreement is induced by
etc. (Sec. 14).
coercion, undue influence, fraud, misrepresentation,
6. Lawful object. The object of the agreement must be lawful. In other words, it means that
the object must not be (a) illegal, (6) immoral, or (c) opposed to public policy (Sec. 23). If an
agreement suffers from any legal flaw, it would not be enforceable by law.
7. Agreement not declared void. The agreement must not have been expressly declared
void by law in force in the country (Secs. 24 to 30 and 56).
8. Certainty and possibility of performance. The agreement must be certain and not
vague or indefinite (Sec. 29). lH it is vague and it is not possible to ascertain its meaning, it cannot be
enforced.
10 GENERAL PRINCIPLES OF LAW OF CONTRACT

Examples. (a) A agrees to sell to B "a hundred tons of oil". There is nothing whatever to
show what kind of oil was intended. The agreement is void for uncertainty.
(b) O agreed to purchase a motor van from S"on hire-purchase terms". The hire-purchase
price was to be paid over two years. Held, there was no contract as the terms were not certain
about rate of interest and mode of payment. No precise meaning could be attributed to the
words "on hire-purchase" since there was a wide variety of hire-purchase terms |Scammel v.
Ouston. (1941) A.C. 251].
(c) A company agreed with V that on the expiration of V's existing contract, it would
favourably consider an application by V for a renewal of his contract. Held, the agreement was
not intended to bind the company to renew its contract with V and imposed no obligation on it
to review it |Montreal Gas Co. v. Vasey, (1900) A.C. 595]
The terms of the agreement must also be such as are capable of performance. Agreement to do
an act impossible in itself cannot be enforced [Sec. 56 (1)]. For example, where A agrees with B to
put life into B's dead wife, the agreement is void as it is impossible of performance.
9. Legal formalities. A contract may be made by words spoken or written. As regards the
legal effects, there is no difference between a contract in writing and a contract made by word of
mouth. It is, however, in the interest of the parties that the contract should be in writing. There are
some other formalities also which have to be complied with in order to make an agreement legally
enforceable. In some cases, the document in which the contract is incorporated is to be stamped. In
some other cases, a contract, besides being a written one, has to be registered. Thus where there is
a statutory requirement that a contract should be made in'writing or in the presence of witnesses or
registered, the required statutory formalities must bee complied with (Sec. 10, para 2).

CLASSIFICATION OF CONTRACTS
Contracts may be classified according to their (1) validity, (2) formation, or (3) performance.

1. Classification according to validity

A contract is based on an agreement. An agreement becomes a contract when all the essential
elements referred to above are present. In such a case, the contract is a valid contract. If one or
more of these elements is/ar missing, the contract is either avoidable, void, illegal or
unenforceable.
Voidable contract. An agreement which is enforceable by law at the option of one or more of
the parties thereto, but not at the option of the other or others, is a voidable contract [Sec. 2 (i)).
This happens when the essential element of free consent in a contract is missing. When the consent
of a party to a contract is not free, i.e., it is caused by coercion, undue influence, misrepresentation
or fraud, the contract is voidable at his option (Secs. 19 and 19-A). The party whose consent is not
free may either rescind (avoid or repudiate) the contract if he so desires, or elect to be bound byit. A
voidable contract continues to be valid till it is avoided by the party entitled to do so.
Example. A promises to sell his car to B for Rs. 20,000. His consent is obtained by use of
force. The contract is avoidable at the option of A. He may avoid the contract or elect to be
bound by it.
A contract becomes voidable in the following two cases also:
(1) When a person promises to do something for another person for a consideration but the
other person prevents him Irom pertorming his promise, the contract becomes voidable at na
option (Sec. 53).
NATURE OF CONTRACT 11
Example. A and B contract that B shall execute certain work for A for Rs. 1,000. B is
ready and willing to execute the work accordingly but A prevents him from doing so. The
contract is voidable at the option of B and if he clects to rescind it, he is entitled to recover from
A compensation for any loss which he has incurred by its non-performance.
(2) When a party to a contract promises to perform an obligation within a specified time, any
failure on his part to perform his obligation within the fixed time makes the contract voidable at the
option of the promisee (Sec. 55, para 1).
When a person at whose option a contract is voidable rescinds it, the other party thereto need
not perform any promise therein contained in which he is promisor. If the party rescinding the
contract has received any benefit under the contract from another party to such contract, he shall
restore such benefit, so far as may be,.to the person from whom it was received (Sec. 64). The party
rightfully rescinding the contract is also entitled to compensation for any damage which he has
sustained through the non-fulfilment of the contract (Sec. 65).

Void agreement and void contract

Void agreement. An agreement not enforceable by law is said to be void (Sec. 2 (g)]. A void
agreement does not create any legal rights or obligations. It is a nullity and is destitute of legal
effects, altogether. It is void ab initio, i.e., from the very beginning as, for example, an agreement
with a minor or an agreement without consideration.
Void contract. A contract which ceases to be enforceable by law becomes void when it ceases
to be entorceable |Sec. 2 (g)|. A contract, when originally entered into, may be valid and binding on
the parties, e.g., a contract to import goods from a foreign country. It may subsequently become
void, e.g., when a war breaks out between the importing country and the exporting country.
It is illogical to talk of a void contract originally entered into, for what is supposed to be, a
contract is no contract at all. We may talk of such a contract as a void agreement.
For a detailed discussion of void contracts, refer to Chapter 7.
Illegal agreement. An illegal agreement is one which transgresses some rule of basic public
policy or which is criminal in nature or which is immoral. Such an agreement is a nullity and has
much wider import than a void contract. Al illegal agreements are void but all void agreernents
or contracts are not necessarily illegal. An illegal agreement is not only void as between the
immediate parties but has this further effect that even the collateral transactions to it become tainted
with illegality. A collateral transaction is one which is subsidiary, incidental or auxiliary to the
principal or original contract.
Example. B borrows Rs. 5,000 from A and enters into a contract with an alien to import
prohibited goods. A knows of the purpose of the loan. The transaction between B and A is
collateral to the main agreement. It is illegal since the main agreement is illegal.
If the main agreement is void, the collateral transactions to it are not affected. In the above case,
if B had entered into a void agreement with a minor. the contract between B and A would not have
been affected.
Unenforceable contract. An unenforceable contract is one which cannot be enforced in a
Court of law because of some technical defect such as absence of writing or where the remedy has
been barred by lapse of time. The contract may be carried out by the parties concerned; but in the
event of breach or repudiation of such a contract, the aggrieved party will not be entitled to
remedies.
the legal
12 GENERAL PRINCIPLES OF LAw OF. CONTRACT

2. Classification according to formation

A contract may be (a) made in writing or by word of mouth, or (b) inferred from the conduct of
the parties or the circunmstances of the case. These are the modes of formation of a contract.
Contracts may be classified according to the mode of their formation as follows:
Express contract. If the terms of a contract are expressly agreed upon (whether by words
spoken or written) at the time of formation of the contract, the contract is said to be an express
contract. Where the offer or acceptance of any promise is made in words, the promise is said to be
express (Sec. 9). An express promise results in an express contract.

Implied contract. An implied contract is one which is inferred from the acts or conduct of the
parties or course of dealings between them. It is not the result of any express promise or promises
by the parties but of their particular acts. It may also result from a continuing course of the parties.
Where the proposal or acceptance of any promise is made otherwise than in words, the promise is
said to be implied (Sec. 9). An implied promise results in an implied contract.
Examples. (a) There is an implied contract when AA-
i) gets into a public bus, or
ii) takes a cup of tea in restaurant, or
(ii) obtains a ticket from an automatic weighing machine, or
(iu) lifts B's luggage to be carried out of the railway station.
(b) A fire broke out in P's farm. He called upon the Upton Fire Brigade to put out the fire which
the latter did. P's farm did not come under the free service zone although he believed to be so. Held,
he was liable to pay for the service rendered as the service was rendered on an implied promise to
pay 1Upton Rural District Councilv. Powell, (1942) All E.R. 220].
Quasi-contract. Strictly speaking, a quasi-contract is not a contract at all. A contract is
intentionally entered into by the parties. A quasi-contract, on the other hand, is created by law. It
resembles a contract in that a legal obligation is imposed on a party who is required to perform it. It
rests on the ground of equity that "a person shall not be allowed to enrich himself unjustly at the
expense of another."
Example. T, a tradesman, leaves goods at C's house by mistake. C treats the goods as his
own. C is bound to pay for the goods.
E-Commerce contract. An E-commerce contract is one which is entered into between two
parties via Internet. In Internet, different individuals or companies create networks which are linked
to numerous other networks. This expands the area of operation in commercial transactions for any
person.

3. Classification according to performance

To the extent to which the contracts have been performed, these may be classified as-
(1) Executed contract. 'Executed' means that which is done. An executed contract is one in
which both the parties have performed their respective obligations.

Example. Aagrees to paint picture for B for Rs. 100. When A paints the picture and B
a
pays the price, 1.e., when both the parties perform their obligations, the contract is said to be
executed.
In some cases, even though a contract may appear to be completed at once, its effects may still
continue. Thus when a person buys a bun containing a stone and subsequently breaks one of his
NATURE OF CONTRACT
13

teeth, he has a right to recover damages from the seller [Chapronlere v. Mason, (1905) 21 T.L.R.
633
(2) Executory contract. 'Executory' means that which remains to be carried into effect. An
executory contract is one in which both the parties have yet to perform their obligations. Thus in
the above example, the contract is executory if A has not yet painted the picture and B has not paid
the price. Similarly. if A agrees to engage B as his servant from the next month, the contract is
executory.
A contract may sometimes be partly executed and partly executory. Thus if B has paid the
price to A and A has not yet painted the picture, the contract is executed as to B and executory as
to A.
Another classification of contracts according to the performance is as follows:
Unilateral or one-sided contract. A unilateral or one-sided contract is one in which only one
party has to fulfil his obligation at the time of the formation of the contract, the other party having
fulfiled his obligation at the time of the contract or before the contract comes into existence. Such
contracts are also known as contracts with executed consideration.
Example. A permits a railway coolie to carry his luggage and place it in a carriage. A
contract comes into existence as soon as the luggage is placed in the carriage. But by that time
the coolie has already performed his obligation. Now only A has to fulfil his
obligation, i.e., pay
the reasonable charges to the coolie.
Bilateral contract. A bilateral contract is one in which the obligations on the part of both the
parties to the contract are outstanding at the time of the formation of the contract. In this sense.
bilateral contracts are similar to executory contracts and are also known as contracts with executory
consideration.

CLASSIFICATION OF CONTRACTS IN ENGLISH LAW

In English Law, contractsclassified into (1) formal contracts, and (2) simple
are
contracts
1. Formal contracts. These include (a) contracts of record, and (b) contracts under seal.
(a) Contracts of record. A contract of record is either a judgment of a Court or a
recognisance. A judgment is an obligation imposed by a Court upon one or more persons in favour
of another or others. Strictly speaking, it is not a contract which rests upon agreement. A
recognisance is a written acknowledgment ot a debt due to the Crown. It is usually met with in
connection with criminal proceedings. For example, when a person is arrested, he may be released
on a promise to appear in a Court or to be of good behaviour, subject to a money penalty if the
obligation is broken. This obligation is a recognisance.
Contracts of record derive their binding force irom the authority ot the Court. They are, in fact,
not real contracts because they lack the essential element of consensus. They are enforced
compulsorily by the Court.
(b) Contracts under seal. A contract under seal is one which derives its binding force from
its form alone. It is in writing and is signed, sealed and delivered by the parties. It is also called a
deed or a speciality contract. No consideration is, however, necessary in the case of contracts under
seal.
The contracts, which must be made under seal, include () contracts made without consideration.,
i) contracts made by corporations, (i) conveyances of the legal estate in land or any interest in
 14 GENERAL PRINCIPLES OF LAW OF CONTRACT

land, including leases of land for more than three years, and (iu) a transfer of a British ship. or any
share therein.
Contracts of record and contracts under seal are known as formal contracts because their
validity depends on the form in which they are made.
2. Simple contracts. All contracts which are not made under seal are simple contracts. They
may be in writing or may be made by word of mouth. All simple contracts must be supported by
consideration. These contracts are also known by the older name-parol contracts.
The classification of contracts as formal and simple is according to the English Law. u r laws
know nothing of the formal contracts. Subject to certain exceptions, all contracts under the Indian
Law must be supported by consideration. But there are certain types of contracts which must be in

writing. In certain cases contracts have also to be registered.

Summary
DEFINITION OF CONTRACT
A contract is an agreement made between two or more parties which the law will enforce. According to Sec. 2 (h), a
contract is an agreement enforceable by law. An agreement comes into existence by the process of offer by one party and its
unqualified acceptance by the other party.
The parties who enter into an agreement must agree upon the subject-matter in the same sense and at the same time,
i.e., there must be consensus ad idem.
An agreement may be a social agreement or a legal agreement. A social agreement is that which does not give rise to
law Court to enforce right. A legal agreement is that
legal consequences. In case of its breach the parties cannot go to the
a

which gives rise to legal consequences and remedies in the law Court in case of its breach.
Essentials of contract. (1) There must be an agreement. This involves two parties, one party making the offer and

the other party accepting it. (2) The parties must intend to create legal relationship. (3)
The parties must be capable of
The agreement must be supported by consideration on
enternng into an agreement as regards age and understanding. (4)
must be lawful (7) The
both sides. (5) The consent of the parties must be free and genuine. (6) The object of the agreement
tems of the agreement must be certain and capable of performance. (8) The agreement must not have been expressly
declared as uoid.
CLASSIFICATION OF CONTRACTS
Void agreement-An agreement not enforceable by law [Sec. 2 (g)l.
Void contract-A contract which ceases to be enforceable by law ISec. 2 (]
Voidable contract-A contract which is enforceable by law at the option of one party thereto, but not at the option ol

the other [Sec 2 (4)

llegal agreement-An agreement which invoives the transgression of some rule of basic public policy and is criminal n
nature or immoral. It is not onily void as between the immediate parties but it also taints the collateral transactions witn

illegality.
Express contract-A contract in which the terms are stated in words (written or spoken) by the parties.
Implied contract-A contract which is inlerred from the circumstances of the case or from the conduct of the parties.
Quasi-contract-An obligation created by law, regardless of agreement.
Executed contract-A contract which is wholly performed by both the parties.
Executory contract-A contract in which the prontises of both the parties have yet to be performed.
Partly excutory, partly executed-A contract in which one party has performed his obligation, but the other party has

yet to perform his obligation.

Unilateral contract-A contract in which only one party has yet to perfom his obligation.
Bilateral contract-A contract in which both the parties have yet to perform their obligations