By the end of the lecture we should be able to answer the
The different types of contracts with respect to
performance, enforceability, validity and formation
First of all we will study
[I] Kinds of contracts from the point of view of Enforceability
Illegal or unlawful contract
From the point of view of enforceability a contract may be
valid, voidable, void, unenforceable or illegal.
Valid contract. According to section 2(i), it is”an agreement
enforceable by law”, an agreement becomes enforceable by
law when all the essential elements of a valid contract as
were enumerated in the last lesson are present.
If one or more of these elements is/are missing the contract is
either void, voidable, illegal or unenforceable.
Voidable contract. According to section 2(i), “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.” Thus, a voidable contract
is one which is enforceable by law at the option of one of
the parties only. Until it is avoided or rescinded by the party
entitled to do so by exercising his option in that behalf, it
is a valid contract.
Usually a contract becomes voidable when the consent of one
of the parties to the contract is obtained by coercion, undue
influence, misrepresentation or fraud. Such a contract is voidable
at the option of the aggrieved party i.e., the party whose
consent was so caused (secs. 19 and 19A). but the aggrieved
party must exercise his option of rejecting the contract (i) within
a reasonable time, and (ii) before the rights of third parties
intervene, otherwise the contract cannot be repudiated.
a)A : threatens to shoot B if he does not sell his new Bajaj
scooter to A for Rs. 2,000. B agrees. The contract has
been brought about by coercion and is voidable at the
option of B.
b)A. intending to deceive B. falsely represents that five
hundred quintals of indigo are made annually at A’s
factory, and thereby induces B to buy the factory. The
contract has been caused by fraud and is voidable at the
option of B.
other circumstances under which a contract becomes
voidable. The Indian contract act has laid down certain
other situations also under which a contract becomes
voidable. For example.
When a contract contains reciprocal promises, and one
party to the contract prevents the other from performing
his promises, then the contract becomes voidable at the
option at the party so prevented (sec. 53).
Illustration. A. Contracts with B that A shall whitewash B’s
house for Rs. 100. A. is ready and willing to execute the work
accordingly, but B prevents him from doing so. The contract
becomes voidable at the option of A.