Year: 2020

The Different Elements in The Process of Communication

Sender

The very foundation of communication process is laid by the person who transmits or sends the message. He is the sender of the message which may be a thought, idea, a picture, symbol, report or an order and postures and gestures, even a momentary smile. The sender is therefore the initiator of the message that need to be transmitted. After having generated the idea, information etc. the sender encodes it in such a manner that can be well-understood by the receiver.

Message

Message is referred to as the information conveyed by words as in speech and write-ups, signs, pictures or symbols depending upon the situation and the nature and importance of information desired to be sent. Message is the heart of communication. It is the content the sender wants to covey to the receiver. It can be verbal both written and spoken; or non-verbal i.e. pictorial or symbolic, etc.

Encoding

Encoding is putting the targeted message into appropriate medium which may be verbal or non-verbal depending upon the situation, time, space and nature of the message to be sent. The sender puts the message into a series of symbols, pictures or words which will be communicated to the intended receiver. Encoding is an important step in the communication process as wrong and inappropriate encoding may defeat the true intent of the communication process.

Channel

Channel(s) refers to the way or mode the message flows or is transmitted through. The message is transmitted over a channel that links the sender with the receiver. The message may be oral or written and it may be transmitted through a memorandum, a computer, telephone, cell phone, apps or televisions.

Since each channel has its advantages and disadvantages, the choice of proper selection of the channel is paramount for effective communication.

Receiver

Receiver is the person or group who the message is meant for. He may be a listener, a reader or a viewer. Any negligence on the part of the receiver may make the communication ineffective. The receiver needs to comprehend the message sent in the best possible manner such that the true intent of the communication is attained. The extent to which the receiver decodes the message depends on his/her knowledge of the subject matter of the message, experience, trust and relationship with the sender.

The receiver is as significant a factor in communication process as the sender is. It is the other end of the process. The receiver should be in fit condition to receive the message, that is, he/she should have channel of communication active and should not be preoccupied with other thoughts that might cause him/her to pay insufficient attention to the message.

Decoding

Decoding refers to interpreting or converting the sent message into intelligible language. It simply means comprehending the message. The receiver after receiving the message interprets it and tries to understand it in the best possible manner.

Feedback

Feedback is the ultimate aspect of communication process. It refers to the response of the receiver as to the message sent to him/her by the sender. Feedback is necessary to ensure that the message has been effectively encoded, sent, decoded and comprehended.

It is the final step of the communication process and establishes that the receiver has received the message in its letter and spirit. In other words, the receiver has correctly interpreted the message as it was intended by the sender. It is instrumental to make communication effective and purposeful.

Consider the following points related to the feedback involved in the process of communication:

• It enhances the effectiveness of the communication as it permits the sender to know the efficacy of his message.
• It enables the sender to know if his/her message has been properly comprehended.
• The analysis of feedbacks helps improve future messages. Feedback, like the message, can be verbal or nonverbal and transmitted through carefully chosen channel of communication.
• We can represent the above steps in a model as the model of communication process.

Types of Feedback

Kevin Eujeberry, the world famous leadership exponent mentioned the four types of feedback. The types are as follows:

• Negative Feedback or corrective comments about past behavior
• Positive Feedback or affirming comments about future behavior
• Negative feedforward or corrective comments about future behavior
• Positive feedforward or affirming comments about future behavior

The Model of Communication Process

The process of communication, however, is not as smooth or barrier-free as it seems. From its transmission to receipt, the message may get interfered or disturbed with at any stage by many factors which are known as barriers to effective communication. One of the factors is poor choice of communication method. In addition to a poor choice of communication method, other barriers to effective communication include noise and other physical distractions, language problems, and failure to recognize nonverbal signals. We will discuss these barriers of communication in a subsequent chapter.

An Effective Communication is a communication between two or more persons wherein the intended message is successfully delivered, received and understood.

In other words, the communication is said to be effective when all the parties (sender and receiver) in the communication, assign similar meanings to the message and listen carefully to what all have been said and make the sender feel heard and understood. In the business context, the communication is effective if the information shared among the company employees contributes towards the organization’s commercial success.

The effective communication includes not just the way you use the words but also covers several other skills such as, non-verbal communication, ability to understand your own emotions as well as of the other person with whom you are communicating, engaged listening, ability to speak assertively, etc.

There are several barriers to effective communication which are listed below:

1. Semantic Barriers
2. Organizational Barriers
3. Psychological or Emotional Barriers
4. Personal Barriers

Effective communication in the organization enables the employees to deepen their connection with others and improve teamwork, decision-making, and problem-solving capacity. The communication is a skill which is learned, and an individual can gain spontaneity in it by putting in his extra efforts and participating in more public conversations.

Significance of Effective Communication

In this section, we will understand the significance of effective communication:

Construct and Foster Sustainable and Productive Relationship

Effective communication should be the focus in businesses as it becomes largely difficult to properly construct and foster productive relationship without it.

Give space to Innovations

Effective communication facilitates innovations in a business organization by allowing employees and management to come up with innovative ideas that might further help in the overall development of the organization.

Help Build an Effective Team

A work environment enriched with effective or open communication helps in building a cohesive and effective team. Effective communication always boosts the morale of employees. It brings in the zeal in employees to work towards achieving the common objectives of the organization. Regular internal communication can also lead to an improved work ethic if the staff are reminded of achievements and feel that they are working towards a common goal.

Effective Management

When there is hassle-free and open communication between the management and the employees, it leads to a steady rise in the pace of progress of the organization. Effective communication, therefore, yields effective management. Managers come to know the attitude and grievances of the employees and the latter gets to know the managers’ attitudes towards them and also the policies of the organization.

Contributes to the Overall Growth of the Organization

Effective communication builds desired interpersonal, interdepartmental and management-employee relationship which in turn are essential preconditions for realizing the vision of the organization. In other words, effective communication contributes to the overall growth of the business.

At the professional level, it is essential to know how to deal adequately with peers, make good decisions even in stressful situations. This is one of the reasons why effective communication skills are increasingly valued.

Effective communication in the organization enables the employees to deepen their connection with others and improve teamwork, decision-making, and problem-solving capacity.

Characteristics of Effective Communication

The characteristics or principles of effective communication are pivotal for ensuring a productive communication. The major characteristics are as follows:

Completeness of the Message

Communication must be complete so as not to baffle the recipient. Better communication helps in better decision-making by the latter. It develops and enhances the reputation of an organization.

Clearness and Integrity of the Message

The message to be conveyed or sent must have clarity and integrity for better understanding. Clarity of thoughts and ideas enhances the meaning of the message. The pith and substance of the message should be based on honesty and accuracy.

Conciseness of the Message

The intended message must be free from verbosity and should be so written that it is intelligible at the first sight. Short and intelligible message sent to the receiver is ever appealing and comprehensible. It saves time and cost as it is understood at the first instance.

Consideration of Physical Setting and the Recipient

In order to make communication more effective, the overall physical setting, i.e., the media of communication and the work environment, must be considered. The content of the message must take into account the attitude, knowledge, and position of the recipient.

Clarity of the Message

The message should have clarity of thoughts and ideas in order to be understood clearly. Clear message makes use of exact, appropriate and concrete words and symbols.

Courtesy to be maintained

The sender’s message should be so drafted or prepared that it should be polite, reflective, and enthusiastic. It must show the sender’s respect for the receiver and be positive and focused at the receiver.

Correctness of the Message

The drafting of the message should be done in such a manner that the final message doesn’t have any grammatical errors and repetitions of sentences. The message should be exact, correct and well-timed.

Effective Business Communication

Successful business largely flourishes on effective business communication. Effective communication skills are vital for building active and effective interactions among the colleagues, clients, bosses, and media.

It is of foremost importance for all personnel in all phases of business life in any organization.

Although everyone employed in an organization boasts of having acquired the skills of effective business communication, there is a need ever felt for improving these skills.

Methods of Effective Business Communication

• Web-based communication: For better and improved communication, anytime and anywhere.
• Video conferencing: This allows people in different locations to hold interactive meetings.
• Reports: This is important in documenting the activities of any department.
• Presentations: This is a popular method of communication in all types of organizations, usually involving audiovisual material, like copies of reports, or material prepared in Microsoft PowerPoint or Adobe Flash.
• Telephone meetings: This allows speech over long distance.
• Forum boards: This allows people to instantly post information at a centralized location.
• Face-to-face meetings: The nature of such meetings is personal and should be succeeded by a written follow-up.

Effective Business communication can further be categorized into:

• Effective oral business communication
• Effective written business communication

Effective Oral Business Communication

Effective business communication mostly involves listening and speaking. Both the speaker and the listener share responsibility of making the message clear and understood. Besides, body language, tone of voice, choice of words and phrases, message clarification and communication style also play a role and impact the effectiveness of interpersonal transaction and interactions.

Techniques of Effective Oral Business Communication

In this section, we will discuss the different techniques of effective oral business communication. The techniques are described below:

• Speakers should know how to articulate their message so as to enable the listener to understand it well and deliver it in a manner that is consistent with the message itself.
• The speech or spoken words should be properly worded and concise.
• The speech should be contextual like serious issues are best delivered in a serious tone.
• Knowing the listener(s) and how they react is instrumental in conceiving the subject matter of the speech.
• For effective business communication, quiet location counts much. If one party is distracted by both external and internal distractors like sound, communication fails to yield desired result.
• Involvement of all the concerned is of vital importance to make communication effective. Involvement means complete attention and dedication to discussion or analysis.
• Effective or active listening is essential for participants in a communication. It is practiced by both the speaker and the listener in effective communication.
• In order to become a better listener there is a need to eliminate all distractions during the conversations.
• Active listening involves eye contact, nods, gestures and brief comments to show understanding. On the basis of these gestures and comments, the listener’s comprehension and reaction can be assessed. In case the listener seems confused, the speaker needs to re-assess the wording or delivery of the message.
• The listener may ask questions, validate what is being said and provide input if necessary.
• While speaking or interacting with someone, don’t just listen to whatever they are saying rather be attentive and make mental notes.
• Asking questions during discussion or an important conversation adds weightage to communication. It also helps the participants to learn everything they need to know. It shows that they are listening and confirming understanding and giving respect.
• Questions are powerful instruments to make communication effective. It enables the persons concerned to get required feedbacks.

There are usually two types of questions to be asked during a communication process.

• Close-ended questions, which are often answered with ‘yes’ or ‘no’ are essential when the communicators want to gather basic information quickly or want to obtain an answer without a long or drawn-out explanation.
• Open-ended questions provide a broader and more comprehensive answer.

Feedback is a crucial part of communication and is vitally required by all concerned in a communication process. It marks the end of a communication process. The communicator on one side should convey his/her information in such a way that his/her targets can offer feedback or criticism on the information given.

During a particular conversation, a discussion or meeting proper and relevant communication types and the mediums should be put in place. Visuals should be shown to present information in a pleasant and palatable manner.

Reinforcing a positive and supportive culture will develop a clear understanding between employees. One of the very effective ways of communicating company’s culture is by taking help of the culture deck.

It is hard to have open communication if both sides fold their arms, clench their jaws and refuse to look each other in the eye. Nonverbal communications like gesture, tone of voice, eye contact are more meaningful than spoken words. If nonverbal messages are overwhelming the conversation, it might be better to wait until things settle. Nod your head and maintain an open posture to show you’re absorbing what the other person is saying.

In an organization, communication flows in 5 main directions

1. Downward
2. Upward
3. Lateral
4. Diagonal
5. External

1. Downward Flow of Communication:

Communication that flows from a higher level in an organization to a lower level is a downward communication. In other words, communication from superiors to subordinates in a chain of command is a downward communication. This communication flow is used by the managers to transmit work-related information to the employees at lower levels. Employees require this information for performing their jobs and for meeting the expectations of their managers. Downward communication is used by the managers for the following purposes:

• Providing feedback on employees performance
• Giving job instructions
• Providing a complete understanding of the employee’s job as well as to communicate them how their job is related to other jobs in the organization.
• Communicating the organization’s mission and vision to the employees.
• Highlighting the areas of attention.

Organizational publications, circulars, letter to employees, group meetings etc are all examples of downward communication. In order to have effective and error-free downward communication, managers must:

• Specify communication objective
• Ensure that the message is accurate, specific and unambiguous.
• Utilize the best communication technique to convey the message to the receiver in right form

2. Upward Flow of Communication:

Communication that flows to a higher level in an organization is called upward communication. It provides feedback on how well the organization is functioning. The subordinates use upward communication to convey their problems and performances to their superiors.

The subordinates also use upward communication to tell how well they have understood the downward communication. It can also be used by the employees to share their views and ideas and to participate in the decision-making process.

Upward communication leads to a more committed and loyal workforce in an organization because the employees are given a chance to raise and speak dissatisfaction issues to the higher levels. The managers get to know about the employees feelings towards their jobs, peers, supervisor and organization in general. Managers can thus accordingly take actions for improving things.

Grievance Redressal System, Complaint and Suggestion Box, Job Satisfaction surveys etc all help in improving upward communication. Other examples of Upward Communication are -performance reports made by low level management for reviewing by higher level management, employee attitude surveys, letters from employees, employee-manager discussions etc.

3. Lateral / Horizontal Communication:

Communication that takes place at same levels of hierarchy in an organization is called lateral communication, i.e., communication between peers, between managers at same levels or between any horizontally equivalent organizational member. The advantages of horizontal communication are as follows:

• It is time saving.
• It facilitates co-ordination of the task.
• It facilitates co-operation among team members.
• It provides emotional and social assistance to the organizational members.
• It helps in solving various organizational problems.
• It is a means of information sharing
• It can also be used for resolving conflicts of a department with other department or conflicts within a department.

4. Diagonal Communication:

Communication that takes place between a manager and employees of other workgroups is called diagonal communication. It generally does not appear on organizational chart. For instance To design a training module a training manager interacts with an Operations personnel to enquire about the way they perform their task.

5. External Communication:

Communication that takes place between a manager and external groups such as – suppliers, vendors, banks, financial institutes etc. For instance To raise capital the Managing director would interact with the Bank Manager.

Though grapevine provides innumerable utilities to the organization, still it is not free from defects.

Therefore, managers should try to use grapevine in a way so that the organization can take the highest benefits from it.

Grapevine is a form of informal communication, operates both in internal and external informal channels which can contribute to and benefit the organization. Therefore, it is found in all organizations. It does not follow any prescribed or predetermined rule and spreads any information quickly. Through the grapevine, information flows in different directions linking almost every one of an organization.

It is governed by social and personal relationships rather than officially recognized rules and formalities.

Grapevine operates both in internal and external informal channels. It passes opinions, suspicions, and rumors that generally do not move through formal channels.

By nature, the grapevine is a channel of horizontal communication.

However, in fact, it does not follow any set pattern. It effectively operates horizontally, vertically and even diagonally.

Grapevine is a natural outgrowth person-to-person informal communication channel through which information flows horizontally, vertically or diagonally without following any set rule or regulation among the people within or outside the organization.

5 Ways to make Grapevine Beneficiary to Organization

Grapevine in Business Communication

• Providing real news to the grapevine initiators.
• Considering grapevine as a pulse feeling tool.
• Contradicting the false rumor.
• Allowing workers in the decision-making process
• Developing a good organizational climate.

Providing real news to the grapevine initiators

Managers should identify the people who take an active part in grapevine channels and provide them with real news so that they can transmit real facts to the grapevine channels.

This will eventually, resist transmission of rumor, untrue and distorted messages.

Considering grapevine as a pulse feeling tool

Since grapevine is an important source of receiving feedback, managers should use it as a tool for feeling the pulse of the employees.

Contradicting the false rumor

If any false rumor occurs in the organization, management should immediately contradict and protest the rumor through formal channels. As a result, the feeding of false rumors will decrease.

Allowing workers in the decision-making process

If the workers are allowed to take part in the decision-making process, they will be well informed of the facts.

In such a situation, there will be nothing to suspect and to create a false rumor.

Developing good organizational climate

Good organizational climate impels the employees to develop a sense of belongingness, to maintain status, chain of command and self-respect, and to enhance satisfaction.

All these will facilitate the occurrence of grapevine in the most desired and effective way.

At last, we can say that though the organization cannot hire and fire the grapevine, it can ensure an environment where people can practice grapevine in the most desired and effective way.

4 Patterns or Types of Grapevine

The grapevine communication is usually horizontal in nature. But it can be horizontal, vertical and diagonal. Prof. Keith Davis has classified grapevine into 4 types.

• Single Strand Chain
• Gossip Chain
• Probability Chain
• Cluster Chain

Void means having no legal value and agreement means Arrangement, promise or contract made with somebody.  So void agreement means an agreement that has no legal value.

Traditionally: “An agreement not enforceable by law is said to be void”. [Sec 2(g)]

Legal Position

A void agreement has no legal effect. An agreement which does not satisfy the essential elements of contract is void. Void agreement confers no rights on any person and creates no obligation.

Example of void agreement: An agreement made by a minor, agreement without consideration, certain agreements against public policy etc.

Agreement which become void:

An agreement, which was legal and enforceable when it was entered in to, may subsequently become void due to impossibility of performance, change of law or other reason. When it became void the agreement ceases to have legal effect.

Expressly Declared Void Agreement

There are certain agreements, which are expressly declared to be void.

They are as follows:

(1) Agreement by a minor or a person of unsound mind [Sec (11)]

(2) Agreement of which the consideration or object is unlawful [Sec (23)]

(3) Agreement made under a bilateral mistake of fact material to the agreement [Sec (20)]

(4) Agreement of which the consideration or object is unlawful in part and the illegal part cannot be separated from the legal part [Sec (24)]

(5) Agreement made. Without consideration [Sec (25)]

(6) Agreement in restraint of marriage [Sec (26)]

(7) Agreement in restrain of trade [Sec (27)]

(8) Agreement in restrain of legal proceedings [Sec (28)]

(9) Agreements the meaning of which is uncertain [Sec (29)]

(10) Agreements by way of wager [Sec (30)]

(11) Agreements contingent on impossible events [Sec (36)]

(12) Agreements to do impossible acts [Sec (56)]

Some discussions on void agreement are as follows:

(1) Agreement by a Minor or a Person of Unsound Mind:

A person who has not completed his or her 18 years of age signifies as minor. Law acts as the guardian of minors and protects their rights, because their mental facilities are not mature- they do not possess the capacity of judge what is good and what is bad for them. Accordingly, where is a minor charged with obligations and the other contracting party seeks to enforce those obligations against the minor, the agreement is deemed as void.

A person who does not possess a sound mind or whose mental powers are not arranged or whose mental condition is not under his or her own control. Any agreement by person of unsound mind is absolutely void because he has no capacity to judge, what is good and what is bad for him.

(2) Agreement Made Without Consideration:

An agreement made without consideration is void, unless

1) it is expressed in writing and registered under the law for the time being enforce for the registration of(documents), and is made on account of natural love and affection between parties standing in a near relation to each other; or unless.

2) It is a promise to compensate, wholly or in part, a person who has already voluntarily done something for the promisor, or something which the promissory was legally compellable to do, or unless.

3) It is a promise, made in writing and signed by the person to be charged therewith, or by his agent generally or specially authorized in the behalf, to pay wholly or in part a debt of which the creditor might have enforced payment but for the law for the limitation of suits.

(3) Agreements in Restraint of Marriage

 Every individual enjoys the freedom to marry and so according to section 26 of the contract act “every agreement is restraint of the marriage of any person, other than a minor, is void.” The restraint may be general or partial but the agreement is void, and therefore, an agreement agreeing not to marry at all, or a certain person or, a class of persons, or for a fixed period, is void. However, an agreement restraint of the marriage of a minor is valid under the section.

It is interesting to note that a promise to marry a particular person does not imply any restraint of marriage and is, therefore, a valid contract.

(4) Agreement in Restraint of Trade

The constitution of India guarantees that the freedom of trade and commerce to every citizen and therefore section 27 declares “every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void.” Thus no person is at livery to deprive himself of the fruit of his labor, skill or talent, by any contracts that he enters into.

It is to be noted that whether restraint is responsible or not, if it is in the nature of restraint of trade, the agreement is void always, subject to certain exceptions provided for statutorily.

(5) Agreement in restraint of legal proceedings:

Every agreement, by which any party thereto is restricted absolutely from enforcing his right under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent. Section 28 declares the following two kinds of agreements void:

(a) An agreement by which a party is restrained absolutely from taking usual legal

Proceeding, in respect of any rights arising from a contract.

(b) An agreement which limits the time within which one may enforce his contract

Rights, without to the time allowed by the limitation act.

(6) Uncertain Agreements:

“Agreements, the meaning of which is not certain, or capable of being made certain, are void” (Sec-29). Through Sec-29 the law aims to ensure that the parties to a contract should be aware of the precise nature and scope of their mutual rights and obligation under the contract. Thus, if the word used by the parties are or indefinite, the law cannot enforce the agreement.

(7) Wagering Agreement:

Literally the word ‘wager’ means ‘a bet’ something stated to be lost or won on the result of a doubtful issue, and, therefore, wagering agreements are nothing but ordinary betting agreements.

(8) Agreement Contingent on Impossible Events:

“Contingent agreements to do or not to do anything if an impossible event happens are void, whether the impossibility of the event is known on not to the parties to thr agreement at the time when it is made.” (Sec. 36)

(9) Agreements to do Impossible Act:

“An agreement to do an act impossible in itself is void.” (Sec, 56 Part-1)

A. Classification according to validity:

1. Void contracts:

A void contract is a contract which is not enforceable by law. As a matter of fact, a void contract is not at all a contract, as it is without any legal effect.

The term void contract is defined in Sec2 (j) of the Indian Contract Act, which reads as under: “A contract which ceases to be enforceable by law becomes void when it ceases to be enforceable “.

Thus, when a valid and enforceable contract subsequently becomes legally unenforceable due to some reasons which may be:-

(i) Due to some emergent impossibility or the operation of law, contract may become void (Sec 56);

(ii) Voidable contract becomes void when the concerned party uses his right to repudiate it; and

(iii) A contingent contracts becomes void when the possibility of happening of the concerned event is over.

2. Voidable contracts:

Under Sec 2 (i), “All agreements which are enforceable at the option of any one of the parties, and other party has no such option, are known as voidable contracts.”

It may also be said that a voidable contract is an agreement that is binding and enforceable, but because of the lack of one or more of the essentials of a valid contract, it may be repudiated.

3. Illegal agreement:

An agreement which goes beyond the rule of basic public policy and is criminal in nature or immoral

It is not only void as between the immediate parties but it is also paints the collateral transactions with illegality.

B. Classification according to formation or creation:

1. Express contract:

A contract in which the terms are stated by parties in words, written or spoken.

Sec 9 of the Indian Contract Act contains this provision which reads as under: “So far as the proposal or acceptance of any promise is made in words, the promise is said to be express”.

Thus, a promise made in words is called an express promise. And the express promises result in express contracts.

2. Implied contract:

A contract in which the terms are inferred from the circumstances of the case or conduct of the parties.

Thus, an implied contract is that which is not made in words. Such contracts came into existence on account of act or conduct of the parties. In a continuing course of dealing, the acts or conduct of the parties may give rise to implied contracts.

3. Quasi contract or constructive contract:

It is an obligation created by law regardless of agreement between the parties. As a matter of fact, quasi-contracts are not contracts as there is no intention of the parties to enter into a contract.

In fact, it is an obligation which the law creates in the absence of any agreement. A quasi-contract is based upon the equitable principle that a person shall not be allowed to enrich himself at the expense of another.

C. Classification according to performance:

1. Unilateral contract:

A contract in which one party has performed his obligation while the other party has yet to perform his obligation

Thus, a unilateral contract is a one-sided contract in which only one party has to perform his obligation. In such contracts, promise on one side is exchanged for an act on the other side.

2. Bilateral contract:

A contract in which both the parties have yet to perform their obligations. A bilateral contract is a two-sided contract in which both the parties have to perform their respective obligations, i.e. at the time of .formation of a contract the obligations of both the parties are outstanding.

In such contracts, promise on one side is exchanged for a promise on the other. The bilateral contracts are also known as contracts with executor consideration.

3. Executory contract:

A contract in which the promises of both the parties have yet to be performed. Thus, executory contract is that where under the terms of a contract something remains to be done by the parties.

In other words, where one or both the parties to the contract have still to perform their obligations in future, the contract is termed as executory contract.

4. Executed Contract:

A contract in which both the parties performed their respective promises. When a contract has been completely performed, it is termed as executed contract, i.e. it is a contract where, under the terms of a contract, nothing remains to be done by either party. A contract may be executed at once i.e. at the time when it is made.

For example, in case of cash sales, the contract is executed at once. It may become executed in some future date when the terms of the contract are carried out.

D. Classification on the basis of enforceability:

1. Valid contract:

A valid contract is one which complies with all the elements of a valid contract as provided under Section 10. A valid contract is an agreement which is binding and enforceable at law.

2. Unenforceable contracts:

The unenforceable contracts are those which cannot be enforced in a Court of Law because of some technical defects. In certain cases, there are special provisions of law which require some formalities to be fulfilled, e.g. there are special provisions which provide that a contract must be in writing, or it must be registered, or it must be properly stamped or it must be attested etc.

If such formalities are not properly observed, the contract cannot be enforced in a Court of Law. Otherwise, such a contract is perfectly valid and has all the requirements of a valid contract.

Some of such contracts can be enforced if the technical defect is removed e.g. where a document requires to be stamped and it is understamped (i.e. the stamp affixed is of less value), the contract as such is unenforceable. But if the required stamp is now affixed, the document becomes enforceable.

E. Classification according to English Law:

1. Formal Contracts:

English Contract Act recognizes formal contracts. Validity of these contracts depends upon their form and they are valid even without consideration. They are of two types:-

(i) Contracts under Seal, and

(ii) Contracts of Record.

(i) ‘Contracts under seal’ are in writing and signed by the parties to them. The following contracts should be under seal, otherwise they will not be valid:-

(a) Contracts without consideration;

(b) Lease of land for a period of more than three years;

(c) Contracts by corporations; and

(d) Contracts with British Shipping.

(ii) ‘Contracts of Records’ include the court judgments and recognisances. Obligations in such cases arise out of court judgments and not under contracts.

2. Simple Contracts:

All contracts other than the formal ones are called simple contracts. They may either be in writing or oral. Consideration is also necessary for their validity. Indian Contract Act, 1872 does not recognize ‘Formal Contracts’, but provides for Simple Contracts only.

Section 23 of the Indian Contract Act has specified certain considerations and objects as unlawful. The consideration or objects of an agreement is lawful, unless- it is forbidden by law; is of such a nature that, if permitted, it would defeat the provision 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.
In each of the above mentioned cases the consideration or object of an agreement is deemed to be unlawful. Every agreement in which the object or consideration is unlawful is void.

Some Examples

X promises to obtain for Y an employment in the public service, and Y promises to pay X Rs. 1000 for that. This agreement is void as the consideration in this case is unlawful.

X agrees to let her daughter to hire to Y as a concubine. This agreement is void as it is immoral and as a result opposed to law.

The following agreements are considered to be against public policy:

• Trade with the enemy:
• An agreement between the citizens of two countries at war with each other is void and hence inoperative.
• Agreement in interference with the course of justice:
• All agreements which interfere with the normal course of law and justice are deemed to be opposed to public policy and hence are void.
• Agreements which injure the public services are considered to be void.
• Agreements infringing personal freedom
• Agreements hindering parental duties.
• Agreements hindering marital duties