Contracts can be classified into four broad divisions namely –
- The method of formation
- The time of performance
- The method of formalities
- The method of legality
1. The method of formation:
Under the method of formation of a contract may be three kinds –
- Express contract
- Implied contract
a. Express contract:
Express contract is one which expressed in words spoken or written. When such a contract is formal, there is no difficulty in understanding the rights and obligations of the parties.
b. Implied contract:
The condition of an implied contract is to be understood form the acts, the contract of the parties or the course of dealing between them.
2.The time of performance:
Under the method of the time of performance of contract may be two kinds
- Executed Contract
- Executory Contract
a. Executed Contract:
There are contracts where the parties perform their obligations immediately, as soon as the contract is formed.
b. Executory Contract:
In this contract the obligations of the parties are to be performed at a later time.
3. The method of formalities:
Under the method of the method of formalities of the contract may be two kinds-
- Formal contract
- Informal contract
a. Formal contract:
A formal contract is a contract which is formatted by satisfied all the essentials formalities of a contract.
b. Informal contract:
An informal contract is a contract which is failed to satisfy all or any of the essentials formalities of a contract.
4.The method of legality:
Under the method of the method of legality of the contract may be five kinds
- Valid Contract
- Void Agreement
- Void able Contract
- Unenforceable Agreement
- Illegal Agreement
a. Valid Contract:
An agreement which satisfied all the essential of a contract and which is enforceable through the court is called valid contract.
b. Void Agreement:
An agreement which is failed to satisfied all or any of the essential element of a contract and which is not enforceable by the court is called void agreement. An agreement not enforceable by law is said to be void. A void agreement has no legal fact. It confers no right on any person and created no obligation.
Example: An agreement made by a minor.
c. Void able Contract:
An agreement which is enforceable by law at the opinion of one or more parties of the contract but not at the opinion of the other or others, is a void able contract.
A void able contract is one which can be avoided and satisfied by some of the parties to it. Until it is avoided, it is a good contract.
Example: contracts brought about by coercion or undue influence or misrepresentation or fraud.
d. Unenforceable Agreement:
An Unenforceable Agreement is one which cannot be enforcing in a court for its technical and formal defect.
- An agreement required by law to register but not registeted.
- An agreement with not satisfied stamped.
e. Illegal Agreement:
An illegal agreement is one which is against a law enforcing in Bangladesh.
Example: An agreement to compiled murder.