Contract Law in India: Express to Voidable

🏛️ Introduction

Contracts are the lifeblood of any modern legal and commercial system. Whether it’s a simple transaction like buying groceries or a complex business deal involving multiple parties, contracts provide the structure, certainty, and legal enforceability needed to ensure that the expectations of all parties are clearly defined and protected.

Under the Indian Contract Act, 1872, a contract is defined as an agreement enforceable by law. Every contract involves an offer, acceptance, consideration, and mutual intent to enter into legal obligations. However, not all contracts are created the same. Depending on how they are formed or their enforceability, contracts can be broadly classified into Express, Implied, Void, and Voidable contracts.

Understanding these distinctions is essential not only for lawyers and law students, but also for business owners, service providers, and even individuals who routinely enter into informal agreements in their day-to-day lives. A contract that may seem valid on the surface could turn out to be void or voidable if it lacks certain legal elements, while many implied contracts exist without a single word being exchanged, yet are fully enforceable under law.

🔹 1. Express Contracts

✅ Meaning

An express contract is one where the terms and conditions of the agreement are clearly stated and agreed upon by the parties involved, either orally or in writing. There is no ambiguity regarding what is being offered, accepted, or expected. The intent to form a contract and the obligations of each party are explicitly communicated.

Such contracts are commonly used in both personal and business dealings. The hallmark of an express contract is that every essential element of offer, acceptance, consideration, and mutual intent is conveyed in clear terms.

📜 Relevant Legal Provision

👉 Section 9 of the Indian Contract Act, 1872:

“In so far as the proposal or acceptance of any promise is made in words, the promise is said to be express.”

This means that when parties to a contract communicate their intentions using spoken or written words, such a promise is considered express and legally recognizable under Indian law.

📌 Example

Suppose Mr. A agrees to sell his car to Mr. B for ₹5,00,000. They both sign a written agreement that clearly states:

• The vehicle details
• The agreed price
• The date of payment
• The date and mode of delivery

This is an express contract because the terms are precisely stated and acknowledged by both parties.

Even a verbal agreement with specific terms, such as hiring a contractor to paint a house for ₹20,000, where both parties agree on scope and payment, can qualify as an express contract, though such oral agreements may face practical challenges in proving terms in case of a dispute.

✨ Key Features of Express Contracts

• Clearly Communicated Terms: The obligations, rights, and expectations of each party are laid down in unambiguous language.
• May Be Oral or Written: While written contracts are easier to enforce due to the presence of documented evidence, oral express contracts are also valid under Indian law if properly proved.
• Legal Certainty and Transparency: Express contracts reduce the chances of disputes, as each party knows exactly what has been agreed upon.
• Suitable for a Wide Range of Transactions: Express contracts are frequently used in sales, employment, service agreements, leases, partnerships, and more. 

🧾 Practical Importance

• Evidence in Disputes: If any party fails to fulfill their obligations, the express terms can be used in court to enforce the contract or claim damages.
• Risk Mitigation: Express contracts help mitigate misunderstandings and misinterpretations, especially in high-value or long-term agreements. 

🔹 2. Implied Contracts

✅ Meaning

An implied contract is a legally enforceable agreement that is not written or spoken in express terms, but is inferred from the conduct, circumstances, or the established course of dealings between the parties involved. In such contracts, the law assumes that a contract exists based on the parties' behavior and the situation in which they interact.

Implied contracts are deeply embedded in everyday transactions where there is mutual intention to contract, and one party provides a service or good with the expectation of payment or reciprocal action, even without a verbal or written agreement.

📜 Relevant Legal Provisions

👉 Section 9 of the Indian Contract Act, 1872:

“In so far as such proposal or acceptance is made otherwise than in words, the promise is said to be implied.”

This provision clarifies that when an offer and acceptance are made not by words but through conduct, such promises and agreements are recognized by law and can be enforced.

👉 Section 2(h) of the Indian Contract Act, 1872:

“An agreement enforceable by law is a contract.”

👉 Section 2(e) defines “agreement” as:

“Every promise and every set of promises form the consideration for each other.”

These provisions, read together, indicate that if parties act in a way that reflects mutual assent and consideration, the agreement becomes a legally binding contract, even if not spoken or written.

📌 Example

Imagine you enter a restaurant, sit down, and order food. You finish your meal and request the bill. Even though no formal words were exchanged regarding payment, the act of ordering and consuming food clearly implies that you will pay for it. This forms an implied contract, as your conduct and the restaurant’s service create a mutual obligation.

Similarly, boarding a public bus or using a paid parking service assumes a tacit agreement to pay the applicable fee, despite no express exchange of terms.

✨ Key Features of Implied Contracts

• Arises from Conduct or Circumstances: The agreement is inferred from actions, not express communication.
• Legally Recognized and Enforceable: Indian contract law permits such contracts if all essential elements (offer, acceptance, consideration, and intent) can be inferred.
• No Need for Written Documentation: Though not written, implied contracts can be proven through facts, behavior, and evidence.
• Commonplace in Daily Life: Most day-to-day transactions — like paying utility bills, taking transport services, or using professional services — are governed by implied contracts.

🔍 Types of Implied Contracts

1. Implied-in-Fact Contracts
• Created by circumstances and conduct (e.g., receiving a haircut at a salon).
2. Implied-in-Law Contracts (Quasi-Contracts)
• Recognized by law to prevent unjust enrichment, even if there was no actual agreement.
• Relevant Provisions:
• Sections 68–72 of the Indian Contract Act, 1872, deal with quasi-contractual obligations, such as:
• Section 70: Obligation of person enjoying benefit of non-gratuitous act.
• Section 72: Recovery of money paid under mistake or coercion. 

🧾 Practical Importance

• Legal Protection Without Formal Agreement: Implied contracts ensure legal remedies even when no document or express words exist.
• Encourages Fairness in Commercial Practices: Prevents one party from benefiting at the expense of another without fulfilling obligations.
• Widespread Application: From domestic help payments to repeated business orders without a new agreement, implied contracts regulate countless interactions.

🔹 3. Void Contracts

✅ Meaning

A void contract is an agreement that is not legally enforceable from the very beginning, or becomes unenforceable due to subsequent legal impossibility or illegality. Although it may appear to be a valid contract at the time it is made, a void contract has no legal effect and creates no rights or obligations between the parties.

Such contracts are treated as if they never existed, meaning no party can seek enforcement, damages, or remedies under it. Void contracts are different from voidable contracts, where the agreement is valid until one party chooses to void it.

📜 Relevant Legal Provisions

👉 Section 2(g) of the Indian Contract Act, 1872:

“An agreement not enforceable by law is said to be void.”

👉 Section 56 – Doctrine of Frustration (Impossibility of Performance):

“A contract to do an act which, after the contract is made, becomes impossible or, by reason of some event which the promisor could not prevent, becomes unlawful, becomes void when the act becomes impossible or unlawful.”

👉 Section 23 – Unlawful Consideration or Object:

“The consideration or object of an agreement is unlawful if it is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of any law, or is fraudulent, or involves injury to the person or property of another, or the court regards it as immoral or opposed to public policy.”

These provisions clarify that contracts made for illegal purposes, with unlawful consideration or object, or those rendered impossible due to unforeseen events (such as natural calamities, death, change in law) are declared void by law.

📌 Examples

1. Agreement to Perform an Illegal Act:
   A contract to smuggle goods across international borders or to manufacture counterfeit currency is void from the outset since it involves illegal activity.
2. Contract Rendered Impossible Due to Natural Calamity:
   A contract to hold an international sports event in a stadium that is later destroyed by an earthquake becomes void under Section 56, as the performance has become impossible due to an unforeseen event.
3. Agreement with Unlawful Object:
   A contract between two businesses to fix prices and manipulate market rates (which is contrary to the Competition Act, 2002) is void due to the unlawful object.

✨ Key Features of Void Contracts

• No Legal Enforceability: Such contracts cannot be enforced in a court of law.
• No Legal Rights or Obligations: Neither party can sue the other for breach or demand performance.
• Retrospective Invalidity: Often considered void ab initio (from the beginning), unless declared void later due to impossibility or illegality.
• Can Arise from Various Causes: Includes illegality, lack of consideration, impossibility of performance, or uncertainty in terms.

🔍 Other Provisions Where Contracts Become Void

• Section 20 – Mistake of Fact:
  If both parties are under a mutual mistake of fact essential to the agreement, the contract becomes void.
• Section 24 – Agreements with Unlawful Consideration in Part:
  If part of a contract’s consideration or object is unlawful, and it cannot be separated from the lawful part, the whole agreement becomes void.
• Section 25 – Agreement Without Consideration:
  An agreement made without consideration is void unless it falls under specific exceptions provided by the Act. 

🧾 Legal Consequences of a Void Contract

• No Claim for Damages: Since the contract has no legal status, courts will not award damages for non-performance.
• Restitution May Be Ordered: If benefits were exchanged before the contract was declared void, courts may order restitution under Section 65, which requires a party who received benefits under a void agreement to restore them.

🔹 4. Voidable Contracts

✅ Meaning

A voidable contract is a legally valid and enforceable agreement at the time it is made, but one of the parties has the legal right to rescind (cancel) or affirm the contract, usually because their consent was not freely given. This lack of free consent could be due to factors such as coercion, undue influence, fraud, misrepresentation, or mistake.

Unlike void contracts, which are null and unenforceable from the outset, a voidable contract remains legally binding unless and until the aggrieved party chooses to void it. If the party whose consent was compromised decides not to cancel the contract, it remains valid and enforceable.

📜 Relevant Legal Provisions

👉 Section 2(i) of the Indian Contract Act, 1872:

“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.”

👉 Section 19 – Effect of coercion, fraud, or misrepresentation on contract validity:

“When consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused.”

👉 Sections 15 to 18 – Factors affecting free consent:

• Section 15 – Coercion
• Section 16 – Undue Influence
• Section 17 – Fraud
• Section 18 – Misrepresentation

These provisions collectively ensure that a contract will not bind a party whose consent was improperly obtained. The aggrieved party can either enforce or rescind the contract after discovering the vitiating factor.

📌 Examples

1. Coercion:
   Mr. A is threatened with physical harm unless he signs a property sale deed transferring land to Mr. B. Though the deed is signed, the contract is voidable at Mr. A’s option, as his consent was obtained under coercion (Section 15).
2. Misrepresentation:
   A mobile phone seller falsely claims that a phone has 128GB of storage when it only has 64GB. The buyer, upon learning the truth, may treat the contract as voidable and seek to return the product (Section 18).
3. Undue Influence:
   An elderly man is persuaded by his caretaker to transfer all property rights under emotional pressure and manipulation. This contract may be voidable under Section 16, which deals with undue influence.

✨ Key Features of Voidable Contracts

• Valid Until Rescinded: The contract remains enforceable until the aggrieved party chooses to repudiate it.
• One-Sided Option: Only the party whose consent was affected can choose to void the contract. The other party cannot void it unilaterally.
• Grounded in Lack of Free Consent: Arises mainly due to coercion, fraud, misrepresentation, or undue influence.
• Remedies Available: The aggrieved party may seek rescission, damages, or restitution, depending on the situation.
• May Be Ratified: If the party, after discovering the coercion or fraud, continues to act as if the contract is valid, they may be deemed to have ratified it, making it binding.

🔍 Legal Consequences of Voidable Contracts

• If rescinded, the contract becomes void from the date of cancellation, and the parties are restored to their pre-contractual position as far as possible.
• Under Section 64, if the aggrieved party elects to rescind the contract, they must restore any benefit they have received under the contract.
• If the party does not act within a reasonable time or behaves in a way that implies acceptance, the contract may be deemed affirmed. 

🧾 Practical Significance

Voidable contracts provide legal protection to parties who may have been manipulated, misled, or pressured into entering an agreement. It ensures that contractual obligations are built on voluntary, informed, and fair consent, and that no one can be held to promises made under duress or deception.

In sectors such as real estate, business partnerships, sales, and family settlements, the concept of voidable contracts plays a critical role in ensuring justice and equity.

 

🧾 Comparison Table of Contracts and Their Provisions

Type	Legal Definition	Relevant Section(s)	Status	Example
Express	Terms in words	Section 9 (Express promises)	Enforceable	Written contract to sell goods
Implied	By conduct	Section 9 (Implied promises)	Enforceable	Paying for a cab ride
Void	Not enforceable	Sections 2(g), 23, 56	Not enforceable	Agreement to do an illegal act
Voidable	Valid unless rescinded	Sections 2(i), 15–19	Enforceable until voided	Contract under coercion

 

✅ Conclusion

Understanding the different types of contracts under the Indian Contract Act, 1872, is essential for anyone involved in legal, commercial, or personal transactions. Contracts are not merely formal documents but serve as the foundation of enforceable relationships in everyday life and business. The distinctions between express and implied contracts help us recognize how agreements can be formed, either through clear verbal or written communication or through conduct and circumstances. Similarly, the difference between void and voidable contracts highlights the importance of legality, enforceability, and consent in contractual obligations. A contract lacking a lawful object or consideration, or one that becomes impossible to perform, becomes void and holds no legal value. On the other hand, if a contract is made without free consent due to coercion, fraud, or misrepresentation, it is voidable at the option of the affected party. These legal nuances ensure that parties do not misuse contractual arrangements and that justice is upheld through the enforcement of fair agreements. Therefore, before entering into any contract, one must ensure that the terms are clear, consent is genuine, and the purpose is lawful. When uncertainties arise, seeking legal guidance can prevent future disputes and ensure that your rights and interests are legally protected.

 "Knowledge Is Power, And Service Is a Blessing."