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Contract law in India is governed by the Indian Contracts Act 1872. However, the Contracts Act does not purport to codify all contract law, but it expressly preserves any commercial usurity or incident of a contract that is not inconsistent with the provisions of the Act. Contract law is limited to the application of voluntary civil obligations. Contract law is not able to deal with the whole range of agreements, many agreements remain out of scope because they do not meet the requirement of a contract. A contract is an agreement; an agreement is a promise and a promise is an accepted proposal. Therefore, any agreement is the result of a proposal on the one hand and its adoption on the other. An agreement is considered a contract if it is enforceable by law. Section 10 of the Act deals with the conditions of third-party effectiveness, According to this section, an agreement is a contract if it is concluded in exchange for a certain consideration between the parties responsible for the contract, with free consent and for legitimate purposes. 2. Types of contracts on the basis of their validity: – i) Valid contract: an agreement that contains all the essential elements of a contract is considered a valid contract. A valid contract may be enforced by law. (ii) Null contract[section 2(j)]: an agreement that is not enforceable by law is considered invalid.

An unde concluded contract is a contract that is no longer applicable by law. A contract, if originally concluded, may be valid and binding on the parties. It can be invalidated later. (iii) Questionable contract [section 2(i)]: “An agreement that may be legally applicable to the choice of one or more of the parties, but not to the choice of others or others, is a countervailable contract.” However, the contract remains good and enforceable, unless it is rejected by the injured party. (iv) Illegal dealing: a contract is illegal if it is prohibited by law; of such a nature that, if permitted, the provisions of a law would be nullified or fraudulent; either a violation of a person or property of another person, or the court considers it immoral or contrary to public order. These agreements are punishable. These are void-ab-initio. All illegal agreements are invalid agreements, but not all agreements that are not concluded are illegal. (v) Unenforceable contract: if a contract is essentially good but cannot be enforced by law due to a technical defect, it is qualified as an unenforceable contract. These contracts are neither void nor questionable.3. Invalid agreement: -Invalid contract means that a contract does not exist at all.

The law cannot impose a legal obligation on one of the parties, in particular on the disappointed party, since it is not entitled to protective laws insofar as they are contracts. An agreement on the performance of an illegal act is an example of a void contract or an agreement not concluded….