Types of Contract

Verbal Contracts

A verbal contract is an agreement that is made orally, without any written documentation. These types of contracts are based on trust between the parties involved and are enforceable by law. However, it is difficult to prove the terms of the agreement in court if there is no written record.

Example: A customer orders a custom-made cake over the phone and agrees to pay the baker a certain amount. The baker delivers the cake, but the customer refuses to pay the full amount, claiming that the cake was not as requested.

Provision in India: According to Section 10 of the Indian Contract Act, 1872, all agreements that meet the requirements of a valid contract, including verbal agreements, are legally binding.

Written Contracts

A written contract is an agreement that is recorded in writing and signed by both parties. This type of contract provides clarity and reduces the likelihood of disputes, as the terms are clearly defined in writing.

Example: A company hires an employee and provides them with a written employment contract that outlines the terms of employment, such as salary, benefits, and job responsibilities.

Provision in India: According to Section 2(h) of the Indian Contract Act, 1872, a contract is an agreement that is enforceable by law, and it may be either written or oral.

Express Contracts

An express contract is an agreement in which the terms and conditions are explicitly stated, either verbally or in writing. This type of contract is legally binding and enforceable.

Example: A contractor agrees to build a house for a client for a fixed price, and the terms and conditions of the agreement are clearly stated in a written contract.

Provision in India: According to Section 9 of the Indian Contract Act, 1872, an express contract is formed when the parties explicitly agree to the terms and conditions of the agreement.

Implied Contracts

An implied contract is an agreement that is not expressed in words, but is inferred from the actions and behavior of the parties involved. This type of contract is based on the conduct of the parties rather than any explicit agreement.

Example: A customer enters a store and selects an item to purchase. The customer offers to pay the price displayed, and the cashier accepts the payment. Although there is no written or verbal agreement, an implied contract is formed between the customer and the store.

Provision in India: According to Section 9 of the Indian Contract Act, 1872, an implied contract is formed based on the conduct of the parties involved.

Quasi-Contracts

A quasi-contract is a legal agreement that is created by the court in the absence of an actual contract. This type of contract is based on the principle of equity, and it is intended to prevent unjust enrichment.

Example: A person accidentally damages someone else’s property and voluntarily agrees to pay for the repairs. Although there was no actual contract between the parties, a quasi-contract is formed based on the principle of unjust enrichment.

Provision in India: According to Section 68 of the Indian Contract Act, 1872, a quasi-contract is created by the court to prevent unjust enrichment.

E-contracts

An e-contract is a contract that is formed over the internet or through other electronic means, such as email or electronic signatures. This type of contract is legally binding and enforceable.

Example: A customer purchases a product from an online retailer and agrees to the terms and conditions of the sale, which are displayed on the website. The retailer sends a confirmation email to the customer, which serves as evidence of the agreement.