Contracts can be classified in a number of ways. Specifically, contracts can be classified by how they are formed, how they are to be accepted, and whether they are legally binding.

Contract Formation

Contracts can be classified by how they are formed. With regard to contract formation, there are three types of contracts, namely, express, implied, and quasi-contracts. Express contracts are those formed by language. They can be oral or written. Implied contracts are formed my manifestations of mutual assent other than oral or written language. This usually refers to contracts formed by the parties conduct. Quasi-contracts are not really contracts. Rather, they are construed by the courts to avoid unjust enrichment. Court often find that a quasi-contract was formed to give a plaintiff the ability to recover a benefit conferred on the defendant.

Contract Acceptance

Contracts can also be classified by how they are to be accepted. With regard to acceptance of a contract, there are two types of contracts, namely, bilateral and unilateral contracts. Bilateral contracts are accepted by a mutual exchange of promises. Thus, the contract is accepted by each party making a promise. On the other hand, unilateral contracts are accepted by performance of the parties accepting the contracts. For example, one party may contract for the delivery of a product. This party promises to pay upon delivery. The person accepting the contract accepts the contract by delivering the property or, possibly, by taking steps to deliver the property.

Contract Validity

Contracts can also be classified by whether they are legally binding. With regard to validity, a contract can be void, voidable, or unenforceable. Void contracts are those without any legal effect from the outset. Voidable contracts are those that one or both of the parties may elect to avoid or ratify. Unenforceable contracts are those that are otherwise valid, but that may not be enforceable due to various defenses to the contract.

Next, let’s consider how a contract is formed.