We have detail infromations of What is Law of Contract? Nature and Types of contract.
What is Law of Contract? Nature and Types
Following is the detail informations.
Contract is a agreement made between two or more parties to do or not to do something in a particular way. In every contract, the parties make promoise about something which is to be performed in future.
According to David Walker
” Contract is an agreement between two or more person intended to create a legal abiligations between them and to be legally enforceable.
Essentail Elements of Valid Contract: CLICK HERE
Contract Act ( Karar Ain ) 2056, Section 2 (a)
According to contract Act, “Contract means an agreement enforceable by law, between two or more parties to do or not to do something”.
Nature of Contract
Following are the nature of the contract.
a. Contract is an agreement between two or more persons on a particular matters.
b. Contract creates legal and binding obligations between the parties.
c. Contract establishes a course of actions between the parties which is to be perform by them.
d. COntract provides certain remedies if any things go wrong to the affected party.
e. Contract is recognized and enforceable by law i.e contract law.
Functions of Contract
Following are the functions of contract
a. Contract normally established the value of the transaction.
b. Contract lays down the respective responsibilities of the parties and the standard of performance to be expected of them .
c. Contract enables the economics risks involved in the transactions.
d. Contract provides remedies to the affected party if promoise is not fulfilled.
e. Contract, if effect in instrument by which the spearate and conflectinginterests of the participants can be reconciled and brought in to a common goal.
Types of Contract
Following are the types of the Contract:
1. On the basis of Enforceability Contracts
a. Valid Contract
All contracts having the entire elements of contract are known as valid contract in the eye of law.
b. Void Contract
A contract when originally entered int, may be vaild and bindly on the parties but it ceases to be enforceable by law becausevoild when it caeses to be enforceable under certain grounds.
c. Voidable Contract
Voidable contract are those whose validity depends upon the option of the parties. The contract becomes void from the date of such action taken. It is made without free consent.
d. Unenforceable Contract
Some contract are valid, but can’t be enforced by law known as Unenforceable Contract. The contract which cannot be enforced in a count of law because of technical deffects.
e. Illegal Contract
An illegal contract is one which violates some rule of basic public policy or is criminal in nature or which is immortal.
2. On the basis of formation Contract
Following are the types.
a. Express Contact
If the terms of a contract are expressely agreed upon, whether by words written or spoken, at the time of the formation of the contract is said to be on express contract.
b. Implied Contract
It is one that in inferred from the acts or conducts of the parties, or course of dealings between them. It is a result of their particular acts or conducts thereby law treats them as contracting parties.
c Quasi Contract
Under certain circumstance a person may recieve a benefitfrom other for which the law considers he should pay to the other person even though there is no contract between the parties. Such relations are termed as quasi contarct.
3. On the basis of Existing duty Under a Contract
Following are the types
a. Unilateral Contract
Unilateral Contracts are those where only one party is under obligation to fulfill his promise at the time of formation of th contract, the other party having fulfilled his obligation at the time of the contract or before the contract comes into an existance.
b. Bilateral Contract
A bilateral contract is one in which the obligation on the part of both the parties to the contract atre outstanding at the time of formation of the contract.
4. On the basis of Performance of Contract
a. Executed Contract
If both the parties after the contract fulfill their promise, it becomes an executed contract.
b. Executory Contract
If both of the parties are under obligation to perform their duties under the contract, it is known as executory contract.
5. On the basis of Futue Contingency of Contract.
a. Simple Contract
In a simple contract, the promisor binds himself to performance in any event without conditions. There is a continous obligation to perform the contract.
b. Contingent Contract
It is a contract that’s performance depends upon the happening or non-happening of some future uncertain event collateral to such contract.
Hence, these are the What is Law of Contract? Nature and Types.
Other Important Links:
a. BBS third year all Subject Notes: CLICK HERE
b. BBS third Year Business Lwa Notes: CLICK HERE
c. Meaning of Business Law: CLICK HERE
Frequently Asked Question?
a What is Contract Law?
= Contract is a agreement made between two or more parties to do or not to do something in a particular way.
b. Types of contract Law?
= Contract law is of different types on the basis of different headings.