0All the contracts may be broadly classified into following three main categories:
- According to enforceability i.e., legal validity.
- According to formation i.e., mode of creation.
- According to performance.
- Classification According to Enforceability or Legal Validity
Following is the classification of contracts according to their enforceability:
(a) Valid Contract: A valid contract is that which is enforceable by law.
(b) Void Contract: A void contract is that which is not enforceable by law. It is without any legal effect. It is defined in Section 2 (j) of the Indian Contract Act, as under:
“A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable.”
Example 1.11: A promised to marry B. Later on, B died. In this case, the contract becomes void on the death of B.
(c) Voidable Contract: A voidable contract is that which can be rescinded (i.e., put to an end or terminated) at the option of one of the parties to the contract. It is defined in Section 2 (I) of the Indian Contract Act, as under:
“An agreement which is enforceable by law at the option of one or more of the parties thereon, but not at the option of the other or others, is a voidable contract”
Where consent of a party is not free e.g., when consent is obtained by coercion, fraud, Common Proficiency Test: Mercantile Law misrepresentation etc., the contract becomes voidable at the option of such party who may put an end to the same if he so desires.
Example 1.12: A agreed to sell his car to B for Rs. 70,000. The consent of A was obtained by use of force. The contract is voidable at the option of A, and he may put an end to this contract if he so decides.
(d) Unenforceable Contract: An unenforceable contract is that which cannot be enforced in at court of law because of some technical defects. For example, where the law requires that a contract must be in writing, stamped or registered then the contract cannot be enforced in law if such formalities are not properly observed.
