What are the different types of contracts? Businesses and legalities need contracts. These contracts are written proof of the different factors that will constitute a deal. A contract is a legal agreement that is agreed and signed by the parties that are involved in it. This is why there are many different types of contracts. Each of these types of contracts differs from one another in a sense that they are used in different circumstances.
Adhesion contracts are types of contracts that are drafted by the party who has the bargaining advantage. Here, the bargaining party has the upper hand and makes sure that he leaves the other party with no other option but to sign the contract. These are the types of contracts that are also called ‘take it or leave it contracts’. There are just some times in businesses that you will end up not having a choice but to agree or decline an offer. These types of contracts are often seen in markets of monopolistic manner. However, there are some courts of law that don’t honor these.
Aleatory contracts, on the other hand, are types of contracts that only take effect when certain events occur. These are basically agreements that state that the terms will only take place when natural calamities or events in the economy will take place. This is why these types of contracts are known to be very risky. This is mainly because these events are very unpredictable. An example of aleatory types of contracts is fire insurance policies. Here, if the insured does not have any fire related problems during the term of the policy, then the policy will not take effect.
Executed contracts are types of contracts wherein one party will have no other contribution or executed actions. The definitions of these contacts are not solid. As long as the work will be done, the other party will follow – that’s pretty much it. Express contracts are types of contracts wherein both of the parties of the agreement discuss their terms by either writing or word of mouth. Then, a formal contract will be written that includes the details of this agreement. The only thing left to do by both parties is to sign the contract and make it legal.
Implied types of contracts are those that imply fact and laws. These consist of obligations that are from the mutual agreement of both parties. These are contracts that both parties have intent of promise – which are not verbally expresses. The implied contracts are characterized by not having enough requirements that will make up a contract. This is why most people call the implied contact as a ‘quasi contract’. This is because these contracts depend on their existence explanations. From here, there will be transactions and acts that each party will conduct so that they will be converted into something that will be able to be bound legally. Keep in mind that there is no clear communication here. As long as there is an implied action, then the contract can take place and the parties can move.