TYPES OF CONTRACT
Formal and Informal Contract
Formal contract are normally written contracts. They are usually effected by affixing a seal on a written agreement or document.
Informal or simple contracts are contracts whether written or oral, which are not under seal.
Oral or Written Contract
Oral contracts are contract entered into by the use of spoken words.
Written contracts are contracts documented by written evidences on a paper.
Express or Implied Contract
Express contracts are contracts resulting from actual agreements between the parties.
Implied contracts does not have any evidence of actual agreement between the parties but may still be sustained by the acts or conducts of the parties involved.
This is an agreement that satisfy all the six basic requirements mentioned above. It is enforceable at law.
Void and Voidable Contract
A voidable contract is an agreement lacking in some basic requirements, that may be rejected or adopted (or concurred) by one of the parties e.g. in case of mistake, misrepresentation, ratification etc.
A void contract is an agreement without legal effect and is usually incapable of enforcement e.g. agreement to commit illegal (acts contrary to the law) e.g. murder, forgery, fraud, treason, drug, trafficking, prostitution etc.
Executed and Executory Contract
Executed contract is a contract that has been completely performed.
Executory contract is a contract that has not been completely performed.
Unilateral / Bilateral / Multilateral Contract
Unilateral contract is a one – sided contract which is initially binding only on one person who make a promise, the person to whom promise is made being free to perform his part or not as he wishes e.g. an offer of N500 by Dayo to anyone who finds and returns his lost calculator.
Bilateral contract is a contract involving two parties who make mutual promises to the other.
Multilateral contract – where more than two parties are involved in making mutual promises to one another.
DISCHARGE (DETERMINATION) OF A CONTRACT
A contract is said to be discharge or determined when its obligations are no longer binding on the promisor. Discharge (determination) may be effected by:
- Voluntary agreement between the parties.
- Breach – when a party to a contract refuses to perform the obligation imposed on him under the contract.
- By full performance – where both parties (all parties) have conclusively met or carried out their obligations under the contract.
- Frustration – where either party can not continue due to:
- Fundamental change of circumstances
- Subsequent illegality e.g. alteration of a written law affecting the contract
- Destruction of the subject matter of the contract
- Personal incapacity of parties e.g. death, lunacy, bankruptcy
- Lapse of timee. the end of time agreed between the parties for which the contract is to run.