Kinds of contracts from the point of view of mode of creation
From the point of view of mode of creation a contract may be express or implied or constructive.
1. Express contract. Where both the offer and acceptance constituting an agreement enforceable at law are made in words spoken or written, it is an express contract. For example. A tells B on telephone that he offers to sell his car for Rs. 20,000 and B in reply informs A that he accepts the offer, there is an express contract.
2. Implied contract. Where both the offer and acceptance constituting an agreement enforceable at law are made otherwise than in words i.e., by acts and conduct of the parties, it is an implied contract. Thus, where A, a coolie in uniform takes up the luggage of B to be carried out of the railway station without being asked by B, and B, allows him to do so, then the law implies that B agrees to pay for the services of A, and there comes into existence an implied contract and N is under obligation to pay to M.
It is relevant to state in respect of mode of creation, certain contracts may be a mixture of the ‘express’ and ‘implied’ types of contracts, that is, where out of the two components of an agreement, namely, offer and acceptance, one is expressed in words and the other is implied from acts and circumstances. Such contracts may be called as contracts of mixed character. For example, A offers to buy B’s scooter for Rs. 4,000 and B accepts the offer by sending the scooter itself. Here A’s offer is expressed in words and B’s acceptance is implied form his conduct. It is a contract of mixed character.
1. Constructive or quasi contract. The term ‘constructive or quasi contract is a misnomer, the cases grouped under this type of contracts have little or affinity with contract. Such a contract does not arise by virtue of any agreement, express or implied between the parties but the law infers or recognizes a contract under certain special circumstances. For example, obligation to finder of lost goods to return them to the true owner or liability or person to whom money is paid under mistake to repay it back cannot be said to arise out of a consent, but these are very mush conversed under quasi contracts as per sections 71 and 72 respectively. The contract act has rightly named such contracts as “ certain relations resembling those created by contract”.
A quasi contract is based upon the equitable principle that a person shall not be allowed to retain unjust benefit at the expense of another. Sections 68-72 of the contract act describe the cases which are to be deemed ‘quasi contracts’”.
Now we come to- example, and A says to B, If you dig my garden next Sunday, I will pay you Rs. 500.’ B makes no commitment, but says, I am not sure that I shall be able to, but if I do, I shall be happy to take Rs. 500. This arrangement is not bilateral. A has committed himself to pay Rs. 500 in certain circumstances, but B has made no commitment at all. He is totally free to decide whether he wants to dig A’s garden or not. If B does not turn up on Sunday to dig the garden, A cannot do anything about is. If, however, B reaches to A’s place on Sunday to do the work, it will amount to his acceptance a contract will be formed where both parties will be bound by their performance.
Before I end the discussion on kinds of contracts I would like to discuss another kind of contract called the Standard Form Contract
When a large number of contracts have got to be entered into by a person, from a practical point of view and for the sake of convenience, a standard form for the numerous contracts may be used. An insurance policy, shares or a railway ticket are few examples of such standardized contracts. The “special terms and conditions” become binding as part of the contract only if they are brought to the notice of the acceptor before or at the time of the contract. In view of the unequal bargaining power of the two parties, the courts and the legislature have evolved certain rules to protect the interest of the weaker party:-(1) Reasonable notice – e.g. by printing on a ticket, “For conditions see back”, or obtaining signatures on the document containing terms, or otherwise explaining the the terms,. Where an adequate notice is not given the offeree is not bound by the terms.
(2) Notice should be contemporaneous with the contract – if a party to the contract wants to have exemption from liability he must give a notice about the exemption while the contract is being entered into and not thereafter ( Olley Vs. Marlborough Court. Ltd.)
(3) Terms of contract should be reasonable – if the terms of the contract are unreasonable and opposed to public policy, they will not be enforced.
(4) Fundamental breach of contract – no exemption clause is allowed to permit the non-compliance of the basic contractual obligation i.e. obligation which is fundamental or core of the contract. Thus, the dry cleaner has to be answerable , even if the contract contains all sorts of exemption clauses, if the cloth is altogether lost.
(5) Strict construction – a strict construction shall be applied to exemption clause, and any ambiguity is to be resolved in favour of the weaker party.
(6) Statutory protection – The English Unfair Contract Terms Act, 1977 severely limits the right of the contracting parties to exclude or limit their liability through exemption clauses in the agreement. India lacks such an Act.
What is Quasi Contract? What are the different types of Quasi Contracts.
From the point of view of mode of creation a contract may be express or implied or constructive.
1. Express contract. Where both the offer and acceptance constituting an agreement enforceable at law are made in words spoken or written, it is an express contract. For example. A tells B on telephone that he offers to sell his car for Rs. 20,000 and B in reply informs A that he accepts the offer, there is an express contract.
2. Implied contract. Where both the offer and acceptance constituting an agreement enforceable at law are made otherwise than in words i.e., by acts and conduct of the parties, it is an implied contract. Thus, where A, a coolie in uniform takes up the luggage of B to be carried out of the railway station without being asked by B, and B, allows him to do so, then the law implies that B agrees to pay for the services of A, and there comes into existence an implied contract and N is under obligation to pay to M.
It is relevant to state in respect of mode of creation, certain contracts may be a mixture of the ‘express’ and ‘implied’ types of contracts, that is, where out of the two components of an agreement, namely, offer and acceptance, one is expressed in words and the other is implied from acts and circumstances. Such contracts may be called as contracts of mixed character. For example, A offers to buy B’s scooter for Rs. 4,000 and B accepts the offer by sending the scooter itself. Here A’s offer is expressed in words and B’s acceptance is implied form his conduct. It is a contract of mixed character.
1. Constructive or quasi contract. The term ‘constructive or quasi contract is a misnomer, the cases grouped under this type of contracts have little or affinity with contract. Such a contract does not arise by virtue of any agreement, express or implied between the parties but the law infers or recognizes a contract under certain special circumstances. For example, obligation to finder of lost goods to return them to the true owner or liability or person to whom money is paid under mistake to repay it back cannot be said to arise out of a consent, but these are very mush conversed under quasi contracts as per sections 71 and 72 respectively. The contract act has rightly named such contracts as “ certain relations resembling those created by contract”.
A quasi contract is based upon the equitable principle that a person shall not be allowed to retain unjust benefit at the expense of another. Sections 68-72 of the contract act describe the cases which are to be deemed ‘quasi contracts’”.
Now we come to- example, and A says to B, If you dig my garden next Sunday, I will pay you Rs. 500.’ B makes no commitment, but says, I am not sure that I shall be able to, but if I do, I shall be happy to take Rs. 500. This arrangement is not bilateral. A has committed himself to pay Rs. 500 in certain circumstances, but B has made no commitment at all. He is totally free to decide whether he wants to dig A’s garden or not. If B does not turn up on Sunday to dig the garden, A cannot do anything about is. If, however, B reaches to A’s place on Sunday to do the work, it will amount to his acceptance a contract will be formed where both parties will be bound by their performance.
Before I end the discussion on kinds of contracts I would like to discuss another kind of contract called the Standard Form Contract
(2) Notice should be contemporaneous with the contract – if a party to the contract wants to have exemption from liability he must give a notice about the exemption while the contract is being entered into and not thereafter ( Olley Vs. Marlborough Court. Ltd.)
(3) Terms of contract should be reasonable – if the terms of the contract are unreasonable and opposed to public policy, they will not be enforced.
(4) Fundamental breach of contract – no exemption clause is allowed to permit the non-compliance of the basic contractual obligation i.e. obligation which is fundamental or core of the contract. Thus, the dry cleaner has to be answerable , even if the contract contains all sorts of exemption clauses, if the cloth is altogether lost.
(5) Strict construction – a strict construction shall be applied to exemption clause, and any ambiguity is to be resolved in favour of the weaker party.
(6) Statutory protection – The English Unfair Contract Terms Act, 1977 severely limits the right of the contracting parties to exclude or limit their liability through exemption clauses in the agreement. India lacks such an Act.
What is Quasi Contract? What are the different types of Quasi Contracts.
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Implied Contracts and Express Contracts
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