TYPES OF CONTRACT

Contract is an agreement between two parties.eg A and B if is pressed by law to then it is a contract.
In order to be with contract we need to be with argument.

An agreement is made up of proposal made by one person and accept of that proposal by a person
to whom a proposal is made.

Section 2(1)e of the law of contract act is say "every promise and every set of promise forming the
consideration for each other is agreement. Consider the situation where Ally has set his car to Happy
and want to merry her he will approach Happy and make a proposal to merry her. If Happy loves
Ally ,she will accepts the proposal. At the stage Ally and Happy have reached an agreement.

The basic elements required for the agreement to be legally enforceable contract are mutual
assent, expressed by vald offer and acceptance, adequate consideration, capacity and legally. In some
states elements of consideration can be satisfied by a valid substitute possible remedies for breach of
contract include general damages, consequential damages, reliance damages and specific performance.

In order a contract which is enforceable by law to be completely there are essential ingrediences
of contract to be followed which are

Free consent in section 10 of the Law of contract act. All agreement are contract if they are made by the
free consent of parties competent to contract fo a lawful consideration and with a lawful object, and are
not hereby expressly declared to be void

Provided that nothing herein contained shall affect any law in force, and not hereby expressly repealed
or disapplied by which any contract is required to be made witnesses,or any law relating to the
registration of documents

Also capacity to contract. This refers to the competence to contract persons inter into a contract every
day child, old people, drunker people sell and buy goods it is not common to find that some group for
example child do not have capacity which they doing when sell and Buy goods if short measure is given
child can not stand and defend himself.

Capacity to contract can be by Age or sound mind. Age as explained in section 11(1) of the law of
contract act. Every person is competent to contract who is of age of majority According to the law to
which he is subject and Who os of sound mind and not disqualified from the contract by any law to
which he is subject, and section 11(2) Of the law of contract act. An agreement by a person who is not
hereby declared to be competent to contract is void.

And sound mind in section 12(1)Of the law of contract act. A person is said to be sound mind for the
purpose of making a contract if, at the time when makes a contract, he is capable of understanding it
and of forming a rational judgment as to its effects upon his interests .Also section 12(2)of the law of of
contract act. A person Who is usually of unsound mind, but occasionally of sound mind may make a
contract When he is of sound mind. And section 12(3) of the law of contract act a person who is usually
sound mind, but occasionally of unsound mind, may not make a contract when we he is of unsound
mind.

Also another essential thing in making a contract is lawful consideration. Consideration is common law
allowed exchange of values in good or service, a person who with value must be given value in return. In
section 25(1), an agreement made without consideration is void unless

(a) it is Expressed in writing in electronic form and registered under the law for the time being in force
for the registration or documents, and is made on account of natural love and affection between parties
standing in a near relation to each other.

(b) it is a promise to compensate, wholly or in part, I a person who has already voluntarily done
something for the promisor, or something which the promisor was legally compellable to do.

(c) It is a promise made in writing or electronic form and signed by person to be charged therewith or by
his agent generally or specially authorised in that behalf, to pay wholly or in part a debt of which the
creditor might have enforce payment but for the law for the limitationof suits.

In any of the cases under paragraphs (a),( b) and (c) such an agreement is a contract.

The following are the types of contract

SIMPLE CONTRACT

A simple contract is the simplest form of a legally binding agreement between two or more persons or
parties. They can be either written or orally agreed upon deals.this contract made orally or in writing or
both of them rather than a contract made under seal simple contract require consideration to be valid
but simple contract may be implied from the conduct of parties bound by the contract, however written
contract are preferred for multiple reasons.

Firstly, they prevent one party from making the same verbal agreement with multiple other parties
outside of the agreement, which will protect the business of the other party.

Secondly, since written contracts spell out what both parties are promising to do and how they plan to
do it, they prevent potential misunderstandings and genuine mistakes from happening in regard to the
agreement. That being said, in some cases, oral agreements can still be ruled on by a judge in court.

Simple contract as the contract which made orally or writing or both which is legally binding agreement
between two or more persons or parties should consider various conditions for making a contract as
simple contract should consider the following.

Intention of the Parties

One of the main requirements of forming a valid contract is the intention of the parties involved. What
this means is that there must be an acknowledgment that both parties have intended for an agreement
to be legally binding between them. This intention to the agreement should be mutually illustrated
explicitly as well.

If an issue does arise where one of the parties failed to fulfill their promise to the agreement, a business
can protect itself in court as the court will look at the following factors to determine the issues. Content
of an agreement,Language and conduct of the parties to an agreement,Relationship between parties
and the presumption arising out of that relationship,Context in which the agreement was made,Any
other relevant surrounding,circumstances,Offer and Acceptance of Agreement

The second element that creates a legally binding contract is an offer, followed by the acceptance of
that offer. During the drafting process of a contract, an offer may be rejected or revoked and changed
multiple times until it is finally set in stone. But until both parties agree to it, the contract cannot take
place or be legally enforceable.

This acceptance must be clearly communicated as well. For example, imagine if someone offered to buy
a house and stated that if they did not hear back from the owner they would take the lack of response
as an agreement to own the house. In this example, an acceptance was not clearly communicated. Just
because there is a lack of response does not mean the other party has agreed.

This acceptance of an offer should also be made by someone who has the authority to communicate the
acceptance of that offer and should also be communicated to the offeror. In addition to that, once a
contract is accepted, this acceptance should also be unconditional making it not subject to any
conditions.

Consideration

The third required element of a simple contract is a consideration. This is the value given by one party to
another in exchange for what is agreed upon, whether it be a product or service.

A consideration generally consists of something that benefits the other party. It could be a service or a
product, but generally, a consideration comes in the form of money. You may think of consideration as a
mutual exchange of promises.

Capacity to Enter

The fourth element that is crucial for a simple contract to be valid is whether or not each party has the
capacity to enter into it. If one party falls within a category that considers them to lack the capacity to
enter into a contract, drafting one is pointless as the contract won’t be enforceable against them.

For example, minors, which in most cases are those under the age of 18, do not have any capacity to
enter into a contract. This is to protect those who may lack expertise and knowledge in a certain
situation from getting taken advantage of.

Another example of people who cannot enter into a legal agreement would be those who are judged to
be not mentally fit. This means that the person does not have the mental capacity to fully understand
and demonstrate their understanding of the meaning and the effects of the words within the contract or
just the transaction itself.

Terms

Lastly, for a simple contract to be valid, its terms must be included and sufficiently certain. The terms of
a contract should allow all parties involved to receive their desired end goal which must arrive with no ill
faith which means no attempt at deception can be made.

Each party must abide by the terms and conditions set within the contract. These terms and conditions
should include details regarding services, money, dates, timeframes, and all clauses. For example, in an
agreement between a tenant and a landlord, the terms should state what the tenant must pay the
landlord over what period of time while the landlord provides the property for the tenant to live in.

ONLINE CONTRACT

An online contract is a legal agreement that's been created, agreed and signed electronically, and is
accessible on the internet via browser-based software. Unlike traditional contracts which involve paper
and a wet ink signature, online contracts can be executed using a variety of devices and signed
electronically, making them a convenient option for scaling businesses.Online contracts are designed to
be read and signed without the need for physical paper. Signing is done using eSignature technology,
whereby a signature can be added to the contract in a variety of different ways.An online contract, also
known as an electronic contract or digital contract, is a legally binding agreement entered into
electronically between parties. Online contracts are becoming increasingly common in e-commerce,
software licensing, and other digital transactions. The key components of an online contract are similar
to those of a traditional contract, but there are some unique considerations to keep in mind:

Offer and Acceptance: Like traditional contracts, an online contract requires a clear offer from one party
and acceptance by the other party. This can be done through a "click to agree" button, checkbox, or
other electronic means.

Electronic Signatures: Online contracts may require electronic signatures to indicate acceptance of the
terms. Electronic signatures can take various forms, such as typing a name, using a digital signature, or
clicking an "I agree" button.

Terms and Conditions: The terms and conditions of an online contract should be clearly presented to the
user before they agree to them. This can be done through a pop-up window, a separate webpage, or a
scrollable section that the user must read before accepting.

Recordkeeping: It is important to keep records of online contracts, including the terms agreed upon, the
date and time of acceptance, and any other relevant information. This can help resolve disputes and
prove the existence of a valid contract.
Jurisdiction and Governing Law: Online contracts should specify the jurisdiction and governing law that
will apply in case of disputes. This is particularly important in international transactions where parties
may be located in different countries.

Data Privacy and Security: Online contracts should address data privacy and security concerns, including
how personal information will be collected, stored, and protected in compliance with applicable laws
and regulations.

Accessibility: Online contracts should be accessible to all users, including those with disabilities. This
may require providing alternative formats or accommodations for users who have difficulty accessing
digital content.

When creating or entering into an online contract, it is important to ensure that the terms are clear,
enforceable, and compliant with relevant laws and regulations. Consulting with legal counsel
experienced in online contracts can help navigate the complexities of electronic transactions and ensure
that your online contracts are legally sound.

OFFSHORE CONTRACT

An offshore contract is a legal agreement between a company and a service provider located in a
different country. This type of contract typically involves outsourcing certain business functions or
services to a company located in another country, often to take advantage of lower costs, specialized
expertise, or other advantages. Offshore contracts can cover a wide range of services, including IT
services, customer support, manufacturing, and more. It is important to carefully review and negotiate
the terms of an offshore contract to ensure that both parties are clear on their rights, responsibilities,
and expectations.There are different conditions of an offshore contract typically include the following
key components:

Scope of Work: Clearly define the services or deliverables that the service provider will be responsible
for, including specific tasks, timelines, and quality standards.

Pricing and Payment Terms: Outline the pricing structure for the services, including any upfront costs,
ongoing fees, and payment schedules. Specify the currency in which payments will be made and any
penalties for late payments.

Service Level Agreements (SLAs): Define the performance metrics and service levels that the service
provider is expected to meet, such as response times, uptime guarantees, and quality standards.

Intellectual Property Rights: Clarify ownership of any intellectual property created or used during the
course of the contract, including software, designs, and other proprietary information.

Data Security and Confidentiality: Establish protocols for protecting sensitive data and confidential
information shared between the parties, including data privacy regulations compliance.
Termination and Exit Clauses: Specify the conditions under which either party can terminate the
contract, including notice periods, penalties for early termination, and procedures for transitioning
services to a new provider.

Dispute Resolution Mechanisms: Outline procedures for resolving disputes that may arise during the
course of the contract, such as mediation, arbitration, or litigation.

Compliance with Laws and Regulations: Ensure that the contract complies with relevant laws and
regulations in both the home country of the company and the offshore service provider's country.

Governing Law and Jurisdiction: Specify the governing law that will apply to the contract and the
jurisdiction where any legal disputes will be resolved.

Insurance and Liability: Determine the insurance requirements and liability limits for both parties to
protect against risks associated with the services being provided.

It is essential to carefully review and negotiate these conditions in an offshore contract to protect both
parties' interests and ensure a successful partnership. Consulting with legal counsel experienced in
international contracts can help navigate complex issues and ensure that the contract meets both
parties' needs.

COLLATERAL CONTRACTS

Collateral contracts are agreements related to, but separate from, the main contract. They're usually
made between one party and a third party, with terms that affect the main contract between the other
parties. These agreements can be verbal or written and are enforceable if they meet the necessary legal
requirements.A collateral contract is usually a single term contract, made in consideration of the party
for whose benefit the contract operates agreeing to enter into the principal or main contract, which sets
out additional terms relating to the same subject matter as the main contract. For example, a collateral
contract is formed when one party pays the other party a certain sum for entry into another contract. A
collateral contract may be between one of the parties and a third party.

It can also be epitomized as follows: a collateral contract is one that induces a person to enter into a
separate "primary" contract. For example, if X agrees to buy goods from Y that will, accordingly, be
manufactured by Z, and does so on the strength of assurance as to the high qu.mmise of quality given in
consideration of X's promise to enter into the main contract with Y.

In collateral contracts there are different elements which shows the valid of contract. The following are
the elements of valid contract. A party to an existing contract may attempt to show that a collateral
contract exists if their claim for a breach of contract fails because the statement they relied upon was
not held to be a term of the main contract. It has been held that for this to be successful, the statement
must have been promissory in nature. Remedies may be awarded for breach of a collateral contract.
A collateral contract is one where the parties to one contract enter into or promise to enter into another
contract. Thus, the two contracts are connected and it may be enforced even though it forms no
constructive part of the original contract.

Promissory in nature

A collateral contract is one where the parties to one contract enter into or promise to enter into another
contract. Thus, the two contracts are connected and it may be enforced even though it forms no
constructive part of the original contract.

Intention to induce

The promisor must have expressly or impliedly requested about the main contract and his promissory
statement must have intended to induce the entry of the other party into the main contract. According
to Lord Denning MR, a collateral contract is held binding "when a person gives a promise, or an
assurance to another, intending that he should act on it by entering into a contract'.

Consistency

A collateral contract, if forged between the same parties as the main contract, must not contradict the
main contract. That is, if the term was agreed upon prior to the completion of the formal contract (but
was still included as a term, and could not be executed until completion of the second term), the first
term will still be allowed. Essentially the collateral contracts cannot contradict any element of the main
contract nor the rights created by it.

CONTRACT UNDER SEAL

A contract under seal is a legally binding agreement between two or more parties that is enforceable by
law. It is also known as a formal contract or deed. The term "under seal" refers to the use of a seal or
stamp on the document to signify its importance and authenticity.

For example, a company may enter into a contract under seal with a supplier to purchase goods at a
certain price. The contract would be signed by both parties and stamped with the company's official seal
to make it legally binding.

Contracts under seal are often used in situations where a higher level of formality and legal significance
is required, such as in real estate transactions or loan agreements. They are considered to be more
binding than regular contracts because they require a higher level of commitment from the parties
involved.

In conclusion, understanding the different types of contracts is essential in navigating the legal
landscape of business transactions. Each type of contract serves a specific purpose and has its own set of
requirements and implications. By being aware of the various types of contracts, individuals and
businesses can make informed decisions and protect their interests when entering into agreements. It is
important to seek legal advice when drafting or entering into contracts to ensure that all parties
involved are clear on their rights and obligations.