Contract types is a term used to denote differences in contract form and structure, including compensation arrangements and the amount of risk. Contract types are used and available to different companies and governments to provide flexibility in acquiring the wide variety and volume of services and supplies required by the agencies.
- Express Contracts
An express contract is a legally binding agreement, clearly stated either written or oral. Mutually, there must be an offer made by one party, and an acceptance form the other party. To quickly determine if express contracts have been adequately developed, the courts will efficiently analyze the communications made between the parties during the contract’s formation.
- Implied Contracts
An implied contract is literally ‘implied’ based on the action of those concerned. An implied agreement is ordinarily not penned down, and the words are not explicitly disclosed and discussed yet considered legal. An example of this is an implied warranty that goes whenever there is a purchase of a product. The product is assured to work upon purchase, but in case there’s something wrong happens, there’s an implied warranty meaning there is a need for considerations.
- Adhesion Contracts
An adhesion contract is also known as “standard form contract”. It is usually drafted by one party in a position of power, and leaving the weaker party to “take it or leave it” situation. This type of contract is generally created by businesses providing services and goods in which the customer must either seek services elsewhere or sign the boilerplate contract. Adhesion contracts are commonly used in leases, deeds, insurances, automobile purchases and other forms of consumer credit.
- Unconscionable Contracts
This is the contract that is so the one-sided ad is unfair to the other party and therefore isn’t a legal contract in the eyes of the law. This is the type of contract that leaves the one party with no meaningful and real choice, and it is typically due to significant differences in bargaining power between the parties.
- Contract Under Seal
A contract under seal is also known as a sealed agreement, special contract or specialty contract. A contract under seal is a very formal contract that does not need any considerations and has a signer seal attached. It can be printed on paper or written and can be in full resemblance with just an ordinary contract. The only requirement for this contract is that it should be signed, sealed and well-delivered.
- Unit Pricing Contracts
Under the unit pricing contract, a contractor must be paid for the actual quantity of each item performed as measured in the field of construction. This type of contract is best suited for construction services.
- Aleatory Contracts
An aleatory contract is a type of agreement whose execution or performance is irregular upon the occurrence of a particular event or an uncertain event beyond the control of both parties. Most of the insurance policies are aleatory contracts. Another type of aleatory contract is called an annuity, where each individual has a set of risk of exposure. An annuity contract is an understanding between an investor and a security company where the investor pays a series of premiums to the annuity provider.