All contracts may be grouped into various classifications. A contract may be classified using various methods and guidelines, according to Basic Contract Law for Paralegals written by Jeffrey A. Helewitz, published in 2004. Legal contracts may be grouped by type of obligation, method of creation, type of form, timing, and enforceability.
Obligations: Bilateral Contract vs. Unilateral Contract
The type of obligation may be classified into two types, bilateral or unilateral. A bilateral contract is a promise for a promise. A unilateral contract is a promise for an act.
In a bilateral contract parties are expecting a mutual exchange of promises. Only after the promises have been exchanged is a performance of an act expected. For example, John proposes to Tom that he will buy Tom’s bicycle for $45. When Tom accepts the offer, a bilateral agreement has been formed. John promises to give Tom $45, if Tom promises to give John the bicycle.
Alternatively, a unilateral contract is created when one party has performed a requested act. For example, John tells his attorney that he will pay him $500 if the attorney drafts a legal document he needs for court. Once John’s attorney drafts the legal document a unilateral contract has been formed. However, until the lawyer drafts the legal document, no contract exists.
Method of Creation of a Contract
Contracts may be classified by method of formation. Legal contracts can be either express, implied, or quasi-contracts. Express contracts are formed through mutual assent expressed in words, either orally or in writing.
An implied contract is formed from actions or conduct inferring a promise. For example, if John visits a coffee shop and helps himself to a cup of coffee, his conduct infers that he has accepted obligation to pay for the coffee.
Quasi-contracts are agreements that have one or more, but not all of the required elements to be legal and valid. However, the law may in the interest of fairness, determine that a party should be entitled to some remedy for a loss or injury sustained in a lawsuit.
Form of Contract
Legal contracts may be either formal or informal. A formal contract is a written document that fulfills specific statutory requirements, which vary from state to state. All others are classified as informal.
Timing of a Contract
A contract’s timing determines when parties have enforceable rights and obligations. Legal contracts are considered either executory or executed. If one or both parties still have obligations to perform, then the contract is considered executory. Alternatively, an executed contract is a completed contract in which all parties have performed obligations in accordance to terms and conditions.
Enforceability of a Contract
Enforceability can be classified as valid, void, voidable, or unenforceable. Legal enforceability has six requirements. A void contract is unenforceable because it has not met the requirements. Voidable contracts give a party an option of avoiding his or her legal obligation. For example, a contract entered into by a minor is voidable due to statutory regulations. When the law offers no recourse or remedy for unfulfilled obligations, then it is considered an unenforceable contract.
Classification can be important in a lawsuit involving contract disputes. This can help determine if a valid and enforceable contract exists. Additionally, it will help pinpoint when exactly a legal contract was formed. In some circumstances, classifying a legal contract can be complicated. Therefore, it may be helpful to obtain professional legal advice from an attorney or a prepaid legal service who is versed in contract law in order to help with a lawsuit.
Le Bach Pham - After graduating from UCSD with a bachelor of art in English Literature, I am now a web writer for Demand Studios where I write web ...
