What is a Contract? Types and Standard Forms of Contracts

What is a Contract?

A contract is a legally binding document between two or more parties that defines the rights and duties of parties to an agreement. As per Indian contract act 1872, contract means agreements which are enforceable as such having been made by free consent of the parties, by persons competent to contract for a lawful consideration and lawful object and which are not expressly declared to be void by any statute.


The essential elements of a valid contract as per Section 10 of Indian Contracts Act are;

  • Minimum two parties
  • Proper offer and acceptance between the parties
  • Capacity/competency of parties to contract
  • Free consent
  • Certainty and possibility of performance
  • Agreement not declared as void or illegal
  • Lawful object and agreement
  • Lawful considerations
  • Legal obligations and intentions to create legal relationships
  • Legal formalities
Download and Read Indian Contract Act 1872 from here.

What are the types of Contracts?

The different types of contract categorized as per the method of payment to contractor are as follows;

Some popular Standard Forms of Contracts

1. The JCT (Joint Contracts Tribunal) defines the different types of contract as follows,

  • Traditional Procurement
  • Design and Build Procurement
    • Package Deal or Turnkey Contract
    • Design and Build Contracts
    • Contractor’s design for specific elements only.
  • Management Procurement
    • Management Contracts
    • Construction Management
    • Design-Manage-Construct

2. The NEC (New Engineering Contracts, NEC4) defines the following types of standard forms of contract;

  • Engineering and Construction Contract (ECC)
  • Engineering and Construction
  • Short Contract (ECSC)
  • Engineering and Construction
  • Subcontract (ECS)
  • Engineering and Construction
  • Short Subcontract (ECSS)
  • Term Service Contract (TSC)
  • Term Service Short Contract (TSSC)
  • Professional Service Contract (PSC)
  • Professional Service Short Contract (PSSC)
  • Supply Contract (SC)
  • Supply Short Contract (SSC)
  • Framework Contract (FC)
  • Dispute Resolution Service
  • Contract (DRSC) (previously NEC3 Adjudicator’s Contract)
  • Design Build Operate Contract (DBO)
  • Alliance Contract (ALC)

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