Question

Explain the classification of Contract on the basis of the Performance.

Answer 1

1. Executed Contract: A contract in which both the parties have fulfilled their obligations under the contract. For example X contracts to buy a car from Y by paying cash, Y instantly delivers his car.

2. Executory Contract: A contract in which both the parties are yet to fulfill their obligations, is said to be an executory contract. For example, A agrees to buy B’s cycle by promising to pay cash on 15th June. B agrees to deliver the cycle on 20th June.

3. Unilateral Contract: A unilateral contract is a one-sided contract in which only one party has performed his promise or obligation, the other party has to perform his promise or obligation.

For example, X promises to pay Y a sum of Rs. 10,000 for the goods to be delivered by Y. X paid the money and Y is yet to deliver the goods.

4. Bilateral Contract: A contract in which both the parties commit to performing their respective promises is called a bilateral contract. For example, R offers to sell his fiat car to S for Rs. 10,00,000 on acceptance of R’s offer by S, there is a promise by R to Sell the car and there is a promise by S to purchase the car, there are two promises.