Kinds of Contract Based on Formation and Performance

Contracts are important legal documents that bind parties to certain obligations. There are various types of contracts, and they can be classified based on how they are formed and how they are performed. In this article, we will discuss the different kinds of contracts based on formation and performance.

Contracts Based on Formation

1. Express Contracts: These are contracts in which the terms are explicitly agreed upon by the parties involved. Express contracts can be in the form of written or verbal agreements.

2. Implied Contracts: These are contracts in which the terms are not explicitly agreed upon by the parties involved but are instead inferred from their actions, conduct, or circumstances. Implied contracts often arise when one party provides goods or services to the other party, and the second party accepts them without objection.

3. Unilateral Contracts: These are contracts in which only one party makes a promise to do something in exchange for the other party`s performance. Unilateral contracts often involve rewards for accomplishing a task or finding a lost item.

4. Bilateral Contracts: These are contracts in which both parties make promises to each other. Bilateral contracts are the most common type of contract and can be found in various situations, such as employment agreements and sales contracts.

Contracts Based on Performance

1. Executed Contracts: These are contracts in which both parties have fulfilled their obligations, and the contract is considered complete.

2. Executory Contracts: These are contracts in which one or both parties have not yet fulfilled their obligations. Executory contracts are not yet complete and are often subject to modification or termination.

3. Unenforceable Contracts: These are contracts that cannot be enforced by a court of law because they are illegal or violate public policy. Examples of unenforceable contracts include agreements to commit a crime or contracts that involve fraud or duress.

4. Void Contracts: These are contracts that are not enforceable from the beginning and have no legal effect. An example of a void contract is an agreement to sell something that is illegal, such as illegal drugs.

In Conclusion

Contracts are an essential part of business and personal relationships. Understanding the different types of contracts based on formation and performance can help you make informed decisions and protect your rights in legal disputes. It is important to consult with a lawyer before entering into any contract to ensure that you fully understand your obligations and the legal implications of the agreement.