The Indian Railways are managed by the Ministry of Railways. Post services are run as a department, under the Ministry of Communication. The Delhi Milk Scheme, All India Radio, Doordarshan are other examples of departmental undertakings.

An individual investor who wants to invest in equities and bond with a balance of risk and return generally can invest in mutual funds. Nowadays people invest in stock markets through a mutual fund.

IMR - International Monetary Fund
IBRD - International Bank of Reconstruction and Development
SAARC - South Asian Association for Regional Cooperation.

Now-a-days consumers and workers are well informed about their rights. Consumers expect better quality products at reasonable prices. Similarly, workers desire fair wages and other benefits.

(i) Reliance Industries
(ii) Tata Consultancy Services.

Micro Units Development Refinance Agency Bank.

MNC's are defined to be an enterprise operating in several countries but managed from one country. It engages in various activities like exporting, manufacturing in different countries.

(i) Credit Co-operative Societies are formed with the object of giving short term Finance to its Members.
(ii) The Co-operative Society protects its members from the clutches of the Money lender

(i) Hindrance of Person
(ii) Hindrance of Place
(iii) Hindrance of Time
(iv) Hindrance of Finance
(v) Hindrance of Knowledge

"Banking means the accepting for the purpose of lending or investment of deposits of money from the public, repayable on demand or otherwise and withdrawable by cheque, draft, pay order or otherwise".

The significance of business finance are:
(i) A firm-with adequate business finance can easily start any business venture
(ii) Business finance helps the business organisation to purchase raw materials from the supplier easily to produce goods.
(iii) The business firm can meet financial liabilities like prompt payment of salary and wages, expenses, etc., in time with the help of sound financial support.
(iv) The sound financial support enables the enterprises to meet any unexpected or uncertain risks arising from business environment efficiently.
(v) For example economic slowdown, trade cycles, severe competition, shift in consumer preference, etc.
(v) Sound financial position empowers the enterprise to attract talented man power and introduce latest technology.

A 'common carrier ' is a person who is engaged in the business of carrying goods for hire indiscriminately to all persons. Railways and sea transport do not come under common carrier because they are covered by separate law.
A 'private carrier' is engaged in a causal occupation and carries goods occassions or under a special contract. Its do not carry goods regularly from place-to-place.
The differences between common carrier and private carrier.

	Common Carrier	Private Carrier
1.	He is engaged in regular trade or business.	He is engaged in a causal occupation and carries goods on occasions or under a special contract.
2.	He carries goods for all persons.	He carries goods of particular persons of his own choice.
3.	The liability of common carrier is governed by the carriers act 1865.	The liability of a private carrier is not governed by an act. The liability is that of a bailee.
4.	He carries goods for hire or reward.	He may carry goods for hire or geotitously.
5.	He is generally an insurer of the goods he carries. He is responsible for loss or damage caused either by his negligence or otherwise.	He is responsible only for loss or damage directly attributable due to his negligence.

The aim of industrialisation is to develop all industries, essential for the country. Also, various regions of the country should be equally developed. Private sector may not establish industries in certain regions, where they do not find opportunities to earn more profit. They cannot be compelled to start their undertakings in backward regions. So government can start industries in backward areas.

A Foreign Exchange Bank deals with foreign exchange transactions. It acts as a businessman in buying and selling foreign currencies. It grants loans to exporters and importers. These banks opens a letter of credit in favour of importer which enables him to meet his foreign currency needs. Thus, foreign exchange banks encourages flow of foreign investment into India and capture international capital markets.

The following are the debit items of Current Account.
(i) Goods Import Visible, and
(ii) Invisible Imports includes
(1) Transport services purchased from Foreign Countries.
(2) Banking services purchased from Foreign Countries.
(3) Insurance services purchased from Foreign Countries.
(4) Visit our tourists to Foreign Countries.
(5) Other services purchased from Foreign Countries.
(6) Interest paid on loan in home country.

A public enterprise incorporated under the Indian Companies Act, 1956 is called a government company. These companies are owned and managed by the central or the state government. Section 617 of the Companies Act, 1956 defines "Government Companies" as any company in which not less than 51% of the [paid-up share capital] is held by.
(1) The Central Government; or
(2) Any State Government or Governments; or
(3) Partly by the Central Government and partly by one or more State Governments.

(i) Location:
These shops are located in fairly populous localities where sufficient number of customers can be approached.
(ii) Nature of Product:
These shops deal in a particular product line and specialise in the same product i.e. standardised and branded consumer products.
(iii) Centralised Management:
The manufacturing or procurement of goods for all the retail units is centralised at the head office, from where the goods are dispatched to each of these shops.
(iv) Fixed Price:
The prices of goods are fixed and all sales are made on Cash basis only.
(v) Role of Sales Personnel:
The sales persons play an active role in helping the consumers to complete their shopping i.e. in the selection and choice of their goods as per the tastes

Factoring Process:
1. The firm enters into a factoring arrangement with a factor, which is generally a Financial Institution, for invoice purchasing
2. Whenever goods are sold on Credit basis, an Invoice is raised and a copy of the same is sent to the factor.
3. The debt amount due to the firm is transferred to the factor through assignment and the same is intimated to the customer.
4. On the due date, the amount is collected by the factor from the customer.

The RBI is governed by a Central Board of Directors. The 21 member board is appointed by the Government of India. It consists of :
(i) One Governor and four Deputy Governors appointed for a period of four years.
(ii) Ten directors from various fields.
(iii) Two government officials
(iv) Four directors - one each from local boards.

(i) If he and his friends selected to start public limited company. They can start with more formalities.
1. Issue of prospectus
2. Huge capital
3. Shares can be issued and substituted in huge level of capital (i.e. Authorized capital)
4. Minimum 7 members to start a public company.
5. Maximum number of limit
6. The public company does not restrict the right to transfer its share
(ii) If he decides to start private limited company, my suggestions are as follows
1. Investment arranged privately with his friends
2. He can collect capital with limited capital
3. Private  company cannot issue prospectus
4. One person company also can start, but capital of initial investment can be arranged privately.

Way Bill: The way bill is an acknowledgement of receipt of goods for transport by the carrier. The carrier, accepting goods for transport, issues way bills in the name of the consignors or consignees. It serves as an evidence of the contract of transport. It is also a document of tittle of goods. The ownership of goods represented by a way bill can be transferred by endorsement and delivery of the way bill. If a way bill lost, the consignee will be allowed to clear the goods from the carrier after he executes an indemnity bond.
Railway Receipt: Railway Receipt is an acknowledgement of receipt of goods by the railway for transporting, It serves as a document of title of goods, viz, it shows the title of its holders of the goods. It may be issued in the name of the consignor or consignee. Only on presentation of the railway receipt the railways will deliver the goods, If railway receipt is lost, the consignees can obtain the goods from the railway by executing an indemnity bond. Ownership of the goods can be transferred by endorsement and delivery of the receipt.

1) NEFT:
National Electronic Funds Transfer This was launched by the RBI in 2005. Under this electronic funds transfer system,bulk transfer of transactions is settled in batches during specific timings across India.Individuals and institutions which maintain accounts with a NEFT enabled bank branch are eligible for using NEFT.Transactions do not occur under real time basis.Once in every half hour from 8.00 am to 7.30 pm.23 settlements are allowed in a day.NEFT transfers are not allowed on Sundays and bank holidays.Both NEFT and RTGS use IFSC (Indian Financial System Code) - a 11 digit alphanumeric code,to identify a bank branch. IFSC is provided by IDRBT (Institute for Development & Research on Banking Technology),Hyderabad.
2) RTGS:
Real Time Gross Settlement Systems It was launched by the RBI in 2013.The transactions are settled on real time basis.Gross settlement means the transaction is settled between one bank and another bank without adding any other transactions.RTGS facility is available between 9.00 am to 4.30 pm on weekdays and up to 2.00 pm on Saturdays.In one day the RTGS routes about 60,000 transactions worth about 2,700 billion and covers over 52,000 bank branches located in 10,000 cities and towns. RTGS transfers are not allowed on Sundays and bank holidays.Minimum limit for RTGS transaction is 2 lakhs.
3) Electronic Clearing Services (ECS):
ECS was launched by the RBI in 1995. It is an electronic method of fund transfer from a commerce 1-15.indd 112 24-03-2018 12:56:55 113 bank to another bank.ECS credit can be used to credit salary,dividend,interest,pension etc.and ECS debit is used to debit monthly telephone bills, electricity bills, equated monthly instalments (EMI) payments.For this purpose the account holding individuals and institutions concerned should fill up certain forms and submit to the banks.ECS transactions between banks are settled in the current account maintained in the clearing house.
4) CORE Banking Solutions:
'CORE' stands for 'Centralized Online Real time Exchange'.In the centralized server of the bank,all the details of all the accounts of all the branches of the bank are available.A customer can withdraw money through cheque at any branch of that bank throughout the world.Similarly anyone can deposit money into the account.Entry of the transactions is recorded in the centralized server of the bank in real time and can be seen in all the branches of the bank.This facility is called core banking solutions.
5) Internet Banking or Virtual Banking:
Internet banking refers to performing banking operations through internet,using computers and mobile phone.This can be done by a customer from home or office or any part of the world and all 24 hours of 7 days.

Home trade consists of two main subdivisions namely
Wholesale trade:
"Purchase of goods In bulk from the manufacturers and selling them in smaller quantities to other intermediaries" IS known wholesale trade.
Retail Trade:
Retail trade deals with the distribution of goods in small quantities to the consumers.

The following are the Functions of CWC:
1. To provide agency services for scientific storage of agricultural produce, seeds, manures fertilizers, agricultural implements and other notified commodities.
2. To issue a negotiable warehouse receipt for procuring credit to the owners of goods.
3. To preserve the produce deposited with care and protect against insects and various pests and deterioration due to moisture and dampness.
4. To act as an agent of the government for the purchase and sale, storage, and distribution of specified commodities and transport to and from warehouse.
5. To reduce the cost of storage and facilitate the marketing of produce through proper grading.

Code of business ethics:
Code of Ethics documents the generally accepted principles of Ethical conduct. They are statements of values and principles which define the purpose of an organisation. It gives a clear picture of the standards that employees should follow. It guides them in decision making.
The code of Business Ethics can include the following:
(1) To offer goods at Fair prices.
(2) To supply goods of good quality and not to deal in spurious and sub-standard . products.
(3) To listen to consumer's complaints and to reduce them.
(4) Not to resort hoarding and black marketing.
(5) Not to resort to price cutting with the sole aim of Killing competition.
(6) Not to issue advertisement containing false information or exaggerated claims.
(7) To pay fair wages to its employees and .not to exploit them.
(8) To provide congenial work atmosphere ..
(9) To design production process in such a way as to reduce Environmental pollution.
(10) To keep proper books of Accounts and Records.
(11) To pay Taxes regularly.
(12) Not to overlook Government rules and regulations even at the time of incurring losses.

GST of three kinds :
(i) CGST
(ii) SGST
(iii) UGST
(iv) IGST
a) CGST
Central Goods and Services Tax imposed and collected by Central Government on all supply of goods within the State (intrastate) under CGST ACT 2017.
b) SGST 
State Goods and Services Tax imposed and collected by the State Governments under State GST Act. (Tamil Nadu GST Act 2017 passed by Tamil Nadu Government)
c) UGST
Union Territory Goods and Services Tax - imposed and collected by five Union Territory Administrations in India under UGST Act, 2017.
d) IGST 
1. Inter-State Goods and Services Tax - imposed and collected by the Central Government and the revenue shared with states under IGST Act 2017.
2. IGST On exports - All exports are treated as inter-state supply under GST.
3. Since exports are zero-rated. GST is not imposed on all goods and services exported from India.
4. Any input credit is paid already on exports will be refunded.

Meaning:
ADR is a dollar denominated negotiable certificate representing a non-US company in US market which allows the US citizens to invest in overseas securities.
Features of ADR:
(i) ADRS are denominated only in US dollars.
(ii) They are issued only to investors who are American Citizens.
(iii) The depository bank should be located in US.
(iv) The approval of securities and Exchange commission (SEC) of US needs to be obtained for issuing ADR.
(v) They are sub-classified on the basis of level of clearance made by SEC.
Procedure of ADR :
(i) First of all, a company hands over the shares to a Domestic custodian Bank called DCB.
(ii) Then the DCB request the American Depository Bank (ADB) to issue the shares in the form of ADRs.
(iii) ADB converts the issue which are in rupees into US dollars.
(iv) Finally, ADB issues them to the intending investors.

Arguments against social responsibilities:
Critics of the social responsibility concept put forward the following arguments.
(i) Lack of conceptual clarity :
(1) The concept of Social responsibility is very vague and amenable to different interpretations.
(2) There is no consensus on its meaning and scope.
(3) In such a situation, it would be futile as well as risky to accept social responsibility.
(ii) Dilution of Economic goals :
(1) By accepting social responsibility, business compromise with Economic goals
(2) Business is an Economic Institution and its only responsibility is to make maximum possible profits for its owners.
(3) It would endanger its Economic viability by accepting any other responsibility.
(iii) Lack of Social skill :
(1) Business organisations and their managers are not familiar with social affairs.
(2) There are special social service organisations such as Government and Non-governmental Agencies which can better deal with Social problems.
(iv)  Burden on consumers:
(1) If Business deals with Social problems, cost of doing Business would increase.
(2) These costs will be passed on to consumers in the form of higher prices or will have to be borne by owners.
(3) This would lead to taxation without representation.
(v) Responsibility without power:
(1) Business organisations possess only economic power and not social power.
(2) It is unjust to impose social responsibilities with social power.
(3) If Business is allowed to intervene in social affairs it may perpetuate its own value system to the detriment of society.
(vi) Misuse of Responsibilities: 
(1) Acceptance of social responsibilities will involve diversion of precious management time and talent on social action programmes.
(2) It may result in dilution of valuable corporate resources.
(vii) lack of Yard stick :
(1) Profitability is the common .criteria for decision - making in Business.
(2) Tampering it with social responsibility would make the decision-making process quite complex and controversial.
(viii) Improper role:
(1) The proper role of Business is to use  its resources and energies efficiently so as to earn the best possible return .on Investment within the confines of law and ethics.
(2) Business should concentrate on economic performance leaving social service to other organisations.
(ix) Overloading Responsibility :
(1) Business organisations are already serving society by providing goods and services, generating employment, developing technology and contributing to public exchequer through tax payments.
(2) It would be unjust to overburden them with further responsibilities.

Types of Insurance:
Insurance covers different types of risks. All contracts of insurance can be broadly classified as follows:
i. Life Insurance (or) Life Assurance
ii. Non-life Insurance (or) General Insurance
It can be further classified into:
i. Fire Insurance
ii. Marine Insurance
iii. Health Insurance
iv. Miscellaneous Insurance.
a) Life Insurance:
Life Insurance may be defined as a contract in which the insurance company called insurer undertakes to insure the life of a person called assured in exchange of a sum of money called premium which may be paid in one lump sum or monthly, quarterly, half yearly or yearly and promises to pay a certain sum of money either on the death of the assured or on expiry of certain period.
Importance of Life Insurance:
i. Life insurance provides protection to the family at premature death of an individual.
ii. It gives adequate amount at an old age when earning capacities are reduced.
iii. Life insurance is not only a protection but is a sort of investment because a certain sum is returnable to the assured at the time of death or at the expiry of a certain period.
b) Non-Life Insurance:
It refers as the insurance not related to human but related to properties. .
i) Fire Insurance:
Fire insurance is a contract whereby the insurer, in consideration of the premium paid, undertakes to make good any loss or damage caused by a fire during a specified period upto the amount specified in the policy.
ii) Marine Insurance;
Marine insurance is a contract of insurance under which the insurer undertakes to indemnify the insured in the manner and to the extent thereby agreed against marine losses. The insured pays the premium in consideration of the insurer's (underwriter's) guarantee to make good the losses arising from marine perils or perils of the sea.
iii) Health Insurance:
In mid 80's, most of the hospitals in India were government owned and treatment was free of cost. With the advent of Private Medical Care, the need for Health Insurance was felt and various Insurance Companies introduced Health Insurance as a Product. Presently the health insurance exists primarily in the form of 'Mediclaim policy'.

Advantages of Departmental Undertaking;
Following are the advantages of the departmental undertaking.
a) Easy Formation:
It is easy to set up a departmental undertaking. The departmental undertaking is created by an administrative decision of the Government, involving no legal formalities for its formation.
b) Direct and Control of Parliament or State Legislature:
The departmental undertaking is directly responsible to the Parliament or the State legislature through its overall head i.e. the minister concerned.
c) Secrecy Maintained :
Strategic industries like defence and atomic power cannot be better managed other than government departments. Department undertakings can maintain secrecy in their working.
d) Lesser Burden of Tax on Public :
Earnings of departmental undertaking are entirely paid into Government treasury, resulting in lesser tax burden on the public.
e) Instrument of Social Change :
Government can promote economic and social justice through departmental undertakings. Hence, a departmental undertaking can be used by the Government, as an instrument of social change,
Disadvantages of Departmental Undertaking:
Following are the major limitations of the departmental undertaking.
a) Red-Tapism:
There is too much of procedures which results in delay. Commercial organisation cannot afford delay in taking decisions.
b) Incidence of Additional Taxation:
Losses incurred by a departmental enterprise are met out of the treasury.
This very often necessitates additional taxation the burden of which falls on the Common man.
c) Lack of Competition:
Civil Servants are given control of these undertakings who may not have business outlook or commercial experience. So, they run the undertaking in their own fashion without considering the sovereignty of the consumers.
d) Casual Approach to Work:
As officers of a departmental undertaking are subject to frequent transfers; they develop a sense of casual approach to work. As a result, the operational efficiency of the undertaking suffers a lot.
e) Government Interference:
There is an excessive government interference and control organisation in department. These undertakings are not given freedom to decide their own policies. Centralised control leads to delay in action. Red-tapism and bureaucracy have become the limiting features of these organisations.

Based on the functions of banks:
a) Central Bank:
1. RBI was the Central Bank of India. The functions of the RBI
2. RBI regulates and supervises the whole banking system in the country.
3. It controls the credit in the country
4. RBI has the sole right of note issue.
5. It acts as the banker for the government.
6.It acts as bankers bank.
b) Commercial Banks:
1. Banks which accept deposits from the public and grant loans to traders, individuals, agriculture, industries, transport, etc. in order to earn profit.
2. Their lending is in comparatively small amounts and mostly for short and medium period.
3. They also provide other services like remittance of funds, safe keeping of valuables, collection of cheques, issue of letters of credit, etc.
Examples:
i. State Bank of India
ii. Karur Vysya Bank
iii. Standard Chartered Bank
c) Development Banks:
1. Huge finance required for investment, expansion and modernisation of big industries and others are granted by a separate type of banks called development Banks.
2. They are also called industrial banks. The objective of development banks is not profit.
3. Their aim is to develop the country and create employment opportunities. Finance is provided by them for medium and long terms ranging from five to twenty years.
4. Development banks do not accept deposits from the public.
Examples:
Industrial Finance Corporation of India - IFCI
Small Industries Development Bank of India -SIDBI
d) Cooperative Banks:
All cooperative banks in India are owned by its customers or members who are farmers, small traders and others.
Cooperative banks in India are either urban based or rural based.
Rural cooperative banking structure in India has three tier structure for short term loans and two tier structure for long term loans (refer chart).
For both these structures the apex body is National Bank for Agricultural and Rural Development - NABARD.
Examples:
i. National Agricultural Cooperative Marketing Federation of India Ltd. (NAFED) was set up in 1958 and registered under the Multi State Co-operative Societies Act.
ii. Tamil Nadu State Apex Cooperative Bank - Head Office, Chennai.
iii. Madurai District Central Cooperative Bank Ltd.
iv. Batlagundu Cooperative Urban Bank Ltd. Dindigul District.
e) Foreign Banks:
1. Banks which have registered office in a foreign country and branches in India are called foreign banks.
2. These banks open their offices in big cities and port towns only. Mostly they serve the interests of the multinational companies, employees and other business institutions.
3. Their profitability is higher than Indian banks. In 2017, there were 42 Foreign Banks in India and all of them were scheduled banks.
4. They have to oblige both their home country banking regulations and the RBI regulations.
Examples:
i. Bank of America - The USA
ii. Barclays Bank- The UK
iii. Deutsche Bank - West Germany
f) Regional Rural Banks - RRBs:
1. The RRBs were formed under the Regional Rural Bank Act 1976, jointly by the Central Government, State Government, and a sponsor bank.
2. Their share capital is contributed by these sponsors in the ratio of 50:15:35.
3. They are established as low cost institutions in rural areas.
4. Their objective is to develop rural economy and play supplemeñtary role to cooperative societies.
Examples:
i. Pandian Grama Bank, Tamil Nadu
ii. Pallavan Grama Bank, Tamil Nadu
g) Specialised Banks:
1. Some banks are created for special purposes by the Government.
2. Export and Import Bank of India was set up through Export-Import Bank of India Act, 1981.
3. Its main objective is to facilitate international trade of Indian businessmen.
4. EXIM Bank provides finance for import of technology export product development, pre-shipment and post-shipment and overseas investment.
Example
i. Export - Import Bank of India (EXIM Bank)
h) Local Area Banks:
1. Local Area Bank (LAB) scheme was introduced by the RBI in August 1996.
2. LABs are small private sector banks established in rural and semi-urban areas.
3. Each bank serves two or three adjoining districts only.
4. Their main objective is to mobilise rural savings (accept deposits) and invest them in the same areas.
Examples:
i. Coastal Local Area Bank, Vijayawada, Andhra Pradesh.
ii. Krishna Bhima Smruddhi Local Area Bank, Mahabubnagar, Andhra Pradesh.
iii. Subhadra Local Area Bank Limited, Kolhapur, Maharashtra.
i) Small Finance Banks:
1. Small Finance Banks (SFBs) are private sector banks set up in unbanked and underbanked regions of the country to achieve financial inclusion.
2. The objectives are; mobilising rural savings (accepting deposits) and providing credit to:
i. small and marginal farmers
ii. to micro and small industries and
ii. other unorganised sector entities.
j) Payment Bank:
1. Payment banks are formed to widen the spread of payment and financial services to small businesses, low-income households, and migrant labourers.
2. These banks should be fully networked from the beginning.
3. They offer doorstep banking payment for a small fees prescribed on the basis of the amount.
Examples:
i. Airtel Payment Bank Limited
ii. Paytm Payment Bank Limited and
iii. India Post Payment Bank Limited -IPPBs (Public Sector Bank).
k) Multilateral Development Banks - MDBs:
A Multilateral Development Bank is formed by the Governments of a group of countries. The member countries consist of developed donor countries and borrower countries. International Bank for Reconstruction and Development, Asian Development Bank, African Development Bank, and European Investment Bank are some of the MDBs.

The essential characteristics of business are as follows:
(i) Production or Procurement of Goods:
Goods must be produced or procured in order to satisfy human wants.
(ii) Sale, Transfer or Exchange:
There must be sale or exchange of goods or services. When a person weaves cloth for his personal consumption, it is not business because there is no transfer or sale.
(iii) Dealing in Goods and Service :
Goods produced or procured may be consumer goods like cloth, pen, brush, bag etc., or producer-goods like plant and machinery. Services refer to activities like supply of electricity, gas or water, transportation, banking, insurance etc.
(iv) Regularity of Dealing :
An isolated dealing in buying and selling does not constitute business. The transactions must be regular. For example, if a person buys a scooter for his use and later on disposes it of at a profit, he cannot be said to have been engaged in business. The buying and selling must be recurrent to constitute business.
(v) Profit Motive :
An important feature of business is profit motive. Business is an economic activity by which human beings make their living. It is, in fact, the attraction of profit which spurs people to do business.
(vi) Element of Risk :
The profit that is expected in a business is always uncertain because it depends upon a number of factors beyond the control of the businessman. For example, change in consumer preference, shortage of raw materials, transport
bottlenecks, power-crisis, etc., may upset business calculations and result in loss. That is why profit is said to be reward for risk-taking. Thus any business activity includes an element of risk too.

Danger for Domestic Industries:
MNCs, because of their vast economic power, pose a danger to domestic industries; which are still in the process of development.
Transfer of Outdated Technology :
Where MNCs transfer outdated technology to host nation, it serves no purpose.
No Benefit to Poor People:
MNCs produce only those things, which are used by the rich. Therefore, poor people of host countries do not get, generally, any benefit, out of MNCs.
Deprivation of Job Opportunity of Local People:
MNCs may not generate job opportunities to the people of home country.

On the Basis of the validity:
1. Valid contract :
An Agreement which fulfils all the essential elements prescribed by law on the basis of its creation. For example: 'S' offers to sell his car for Rs 2,00,000 to 'T'. 'T' agrees to buy it. It is a valid contract.
2. Void Contract (2(j)):
A contract which ceases to be enforceable by law. A contract which does not satisfy any of the essential elements of a valid contract is said to be Void. For example A contract between drug dealers to buy and sell drugs is a void initio Contract.
3. Voidable Contract 2(i):
An agreement which is enforceable by law at the option of one or more parties but not at the option of the other or others is a voidable contract. This is the result of coercion, undue influence, fraud and misrepresentation.
4. Illegal Contract:
It is a contract which is forbidden by law. All Illegal agreements are Void but all void agreements or contracts are not necessarily illegal. Contract that is immoral or opposed to public policy are illegal in nature.
i. Unlike Illegal agreements there is no punishment to the parties to a void agreement.
ii. Illegal agreements are. void from the very beginning but sometimes valid contracts may subsequently become void.
5. Unenforceable Contract:
Where a contract is unenforceable because of some technical defect i.e. absence in writing barred by limitation, etc. If the parties perform the contract it will be valid, but the court will not compel them if they do not.