A contract is an agreement between two parties that must include an offer, an acceptance, and a consideration. There are a variety of different types of contracts used for different purposes. In addition, certain types of contracts may be more popular in one jurisdiction than in another. Bilateral and unilateral, implied, viodable, executory, and oral contracts are among the common types of contracts used throughout the world.
Bilateral contracts make up the majority of the contracts drafted. A bilateral contract consists of two parties who are under an obligation to do something or refrain from doing something. For example, a contract for the sale of goods is a bilateral contract. The buyer promises to purchase the product and, in turn, the seller promises to supply the product.
Unilateral contract are less common, but are one of the many valid types of contracts. Where a unilateral contract is concerned, only one of the parties is obligated to do something or refrain from doing something. A reward contract is the best example of a unilateral contract. The person offering the reward promises to pay a sum of money for information leading to the return of someone or something. The person who collects the reward was never obligated to do anything.
A contract itself is not implied, but the terms of a contract may be implied. Jurisdictions handle implied terms in different ways. Some countries, such as India and Australia, have found that a term of good faith is implied in all contracts. The United States has codified many implied terms into statutory law, such as the implied warranties of merchantability, fitness for a particular purpose, workmanship, and habitability.
Void and voidable contracts are not the same in legal terms. A void contract is not a valid contract at all. An example of a void contract is one where the subject of the contract itself is illegal. A voidable contract, on the other hand, is actually a valid contract that may be voided by one of the parties. A contract made with a minor is voidable because a minor cannot be obligated to contract in most jurisdictions and, therefore, has the option to void the contract.
The last two common types of contracts are the executory and oral contract. An executory contract is simply a contract that has yet to be performed or executed. Some jurisdictions require only one party to have continuing obligations under the contract, while others require that both parties have obligations yet to perform for it to be considered an executory contract. Installments contracts for the purchase of a home or vehicle are good examples of an executory contract. Oral contracts, as the name implies, are contracts that are not reduced to writing, but are valid contracts nonetheless.