Types of contracts

The following are some of the more popular types of contract inherent in commerce.

1. Informal Contracts: Informal contracts are simply contracts in the sense that they lack some of the basic. Ingredients of proof that are available in formal contracts. Informal contracts are difficult to enforce.
2. Formal Contracts: Formal contracts are of several main types; namely,
3. Contract Under Seal: This is a written contract that has a seal imprinted or affixed on it, or that has a wax impression upon the paper or has the expression “SIGNED AND SEALED” written on the paper. Contracts under seal are known as Specialty Contracts. They do not necessarily spring from agreement.
4. Contract Of Record: This type of contract is registered in the court and so acknowledge by the court.

• Oral Contract: This is contract entered into orally, i.e with spoken words. For instance, any time are board a public transport (taxi, bus, etc) to take us to a named destination on an agreed price, the contract is oral. Oral contracts are informal in nature and have the force of formal contracts if evidence of proof is available.

1. Written Contracts: This is a documented contract in the sense that the terms of contract are written down. A written contract can be formal or informal depending on the circumstances of the case.
2. Implied Contract: This is contract entered into by the mere conduct or act of both parties. There is no written or oral evidence except the act or conduct of the parties. For instance, any time you buy something from a departmental store or market, a contract is an impliedly.
3. Expressed Contract: This is contract in which both parties have exercised their freedom to make oral or written declarations of their intention and terms of the transaction.

• Valid Contracts: Valid contracts are contracts that have all the essential conditions and elements to make it binding and enforceable.
• Voidable or Void Contracts: This is a contract that may be binding and enforceable but may be rejected by one party due to the absence of an essential element, such as signing under duress, or one party not having legal capacity at the time of making the contract.

1. Void Agreement or Contract: This type has no legal effect and is incapable of enforcement because the subject matter is prohibited by law. For instance, as happened in a Nigerian state in year 2003, a governor-aspirant promised a political “godfather”- ‘If you rig the election and put me into office as governor, I will give you 25% of the monthly Federal allocation to the state’. Such an agreement is void because it is illegal.
2. Executed Contracts: If a contract has been fully performed, it is regarded as executed. In that case the obligee has no further claim to make.
3. Executory Contract: An executory contract is one that has not been fully performed in which case something remains to be done.

• Bilateral Contract: If one promise is given by one party, in exchange for another promise, by another party, a bilateral contract is created. In other words, the offeror makes a promise and the offeree accepts by making his own promise. There is mutuality of obligations in a bilateral contract because each party has no obligation to perform his promise.
• Unilateral Contract: In a unilateral contract, only one party is expected to perform after the contract has been made.

TERMINATION OF CONTRACT

The following are five methods by which a contract may be terminated;

1. Performance
2. By consensus

• Operation of law

1. Frustration
2. Breach of contract.

REMEDIES FOR BREACH OF CONTRACT.

The following remedies are available when there is breach of contract.

1. Damages: The party that has suffered loss has the right to sue for damages.
2. Recession: The parties can ask to be restored to their pre-contractual position in the law court.
3. Injunction: The injured party can obtain a court injunction which is a mandatory order.
4. Justice: This is when the injured party sues to re-enforce the contract.

ASSIGNMENT

Explain the method of terminating a contract