Types of Agreement in Contract Law

Contract law involves a lot of agreements between parties, and understanding the types of agreements in contract law is essential for any business owner or individual entering into a contract.

1. Express Contracts

Express contracts are the most common type of contract and are made either orally or in writing. An express contract clearly states the terms of the agreement between two parties and outlines what each party will do.

For example, a tenant and landlord may enter into an express contract that outlines the rent amount, the length of the lease, and the tenant’s responsibilities.

2. Implied Contracts

Implied contracts are not made explicitly but are instead inferred from the actions of the parties involved. This type of contract is based on the parties’ behavior and conduct, rather than verbal or written communication.

For instance, if someone hires a painter to paint their house, the court may infer that there is an implied contract, even if nothing is written down. This is because the painter’s actions indicate an agreement to provide painting services in exchange for payment.

3. Executed Contracts

An executed contract is a contract that has been fully performed by both parties. Once the contract is executed, the obligations of the parties are completed, and the contract is considered closed.

For example, a vendor who has supplied goods to a business and has been paid in full has executed a contract.

4. Executory Contracts

An executory contract is a contract that is still in progress and has not yet been fully performed. This means that one or both parties still have outstanding obligations to fulfill before the contract is considered complete.

For instance, if a software company enters into an executory contract with a client to develop software, the company will have a contractual obligation to deliver the software, and the client will have an obligation to pay for the services rendered.

5. Unilateral Contracts

A unilateral contract is a contract where one party makes a promise to do something if the other party performs an action.

For example, a company may offer a reward to anyone who provides information leading to the arrest and conviction of someone responsible for a crime.

6. Bilateral Contracts

A bilateral contract is a contract where both parties make promises to each other. Each party`s promise is the consideration (something of value) given to the other party.

For instance, when a person buys a car from a dealership, the dealership promises to provide the car, and the buyer promises to pay for the car.

In conclusion, understanding the different types of agreements in contract law is crucial for anyone entering into a contractual agreement. Proper knowledge of these agreements ensures that both parties understand their obligations and helps to avoid any disputes that may arise.

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