Types of contracts - SS2 Commerce Lesson Note

Voidable Contracts:

A voidable contract is a legally binding agreement that can be canceled or voided by one or both parties involved. This type of contract remains valid until the party with the power to void it exercises their right to do so. Voidable contracts may arise due to factors such as misrepresentation, fraud, undue influence, duress, or the incapacity of one of the parties.

Formal Contracts:

Formal contracts are agreements that must meet specific legal requirements to be enforceable. These requirements typically include a particular form or format, such as being in writing and signed by all parties involved. Examples of formal contracts include contracts for the sale of land or real estate, contracts involving large sums of money, and contracts that must comply with statutory regulations.

Informal Contracts:

Informal contracts, also known as simple contracts or contracts of parol, are agreements that do not require any specific formalities to be legally binding. These contracts can be made orally or through implied conduct, and they are based on the parties' intentions and mutual understanding. Informal contracts are common in everyday transactions, such as buying goods from a store or hiring a service provider.

Oral Contracts:

Oral contracts are agreements that are made verbally and do not involve written documentation. These contracts rely on the spoken word and the trust between the parties involved. While oral contracts can be legally binding, they may be challenging to enforce in court due to the lack of tangible evidence.

Written Contracts:

Written contracts are agreements that are documented in writing and signed by the parties involved. They provide a clear record of the terms and conditions agreed upon by the parties, reducing the chances of misunderstandings or disputes. Written contracts offer more certainty and evidentiary support compared to oral contracts, making them easier to enforce in a legal setting.

Expressed Contracts:

Expressed contracts are agreements where the terms and conditions are explicitly stated and agreed upon by the parties involved. The terms can be communicated orally or in writing. Expressed contracts leave no room for interpretation or ambiguity since the parties have expressly articulated their intentions.

Implied Contracts:

Implied contracts are agreements that are not explicitly stated but are inferred from the conduct, actions, or circumstances of the parties involved. These contracts are based on the implied intentions and mutual understanding of the parties. Implied contracts are typically formed when the actions or behavior of the parties suggest an agreement or an understanding of obligations.