A contract is a legally binding agreement between two parties to do or not to do a particular thing. It defines the obligations of the parties involved. A contract only exists if there is an agreement which is legally binding or enforceable by law. Failure to live up to the contents of the agreement brings legal penalties. Below are the different types of contracts.
The express and implied contracts
An express is a contract where the parties involved have very specific agreements concerning their relationship. Let us use an example of an agreement between one person to sell goods to another at a price of 50,000. This is an express contract because there is a price that has been agreed upon. An implied contract does not have any specific agreements.
Unilateral and bilateral contracts
In a unilateral contract, just one of the parties involved is bound. An example is whereby an individual misplaces some property and offers a reward to anyone who will find it. You realize that there isn’t anyone who is bound to find this property but if found the individual who made the offer is bound to give a reward. A bilateral contract on the hand binds both parties
The valid, void and voidable contracts
A valid contract is that which is enforceable by the law. A void contract is the opposite of valid in that it is not enforceable by law. A void contract is also not binding. Voidable contracts are those that are enforceable by law. This contract, however, can be seen not to be binding if it is found that at the time of the agreement, one of the parties might have been wrongfully influenced or coerced or they may be on the receiving end of some fraudulent plan.
An executed contract
A contract is termed executed if both parties involved have lived up to the terms of the contract and there is nothing else that can be done by either party to validate it more. Both parties have done what they were supposed to do.
An executory contract is a contract in which an act in future still has to be performed. It is the opposite of the executed contract. In simple terms, a contract is termed executory if both parties involved or even one of the parties involved still has a role to perform in this obligation. There is something that has to be done for the contract to be termed executed. Before that, it is an executory contract.