A contract is a form of agreement which stipulates terms and conditions of any activity between two entities. It can either be between two people, organizations or states. Its main objective is to provide very conducive environment for the success of any activity. Most kinds of contracts stipulates the delivery or period through which an activity is to be carried out, code of conduct among the parties involved, payment terms among other critical elements.
Contracts are binding and it’s very necessary to understand all the contents of a contract and preferably be signed before a lawyer or a magistrate as violation of any of the terms is always treated as criminal offence.
There are very many kinds of contracts some of which are briefly discussed below.
The implied in law contacts
These kinds of contacts are also referred to as the quasi-contracts. They are not the actual contracts which are normally negotiated when two parties involved sign any business deal. Here is an example of quasi-contract: suppose an electrician is doing his/her normal patrol routine and he notices a dangerously hanging electrical cable and fixes it in the absence of the owner, then he/she can only be compensated through these kinds of contracts. In this case, the owner of the house may not be aware of what really happened while the electrician must also be compensated for his/her efforts.
Other kinds of contracts are the unilateral-bilateral contracts
A bilateral contract can be termed as an exchange program in the simplest language possible. Here, the parties involved offer each other promises which they must live up to. An example of these kinds of contracts may be between a company and businessmen where the company is expected to provide the businessman with commodities as the businessman is obliged to pay the company for the goods they had agreed the company is to supply. This is normally based on the promises each party makes and they are both obliged to fulfill the promises.
The other kinds of contract which are closely related to the bilateral contracts are the unilateral contracts.
In this contract, its only one party which makes a promise as opposed to the bilateral contract. The promise only remains valid only and only if the actual duty for which the promise was made has been performed as per the agreement. For example, a company say k, may promise to pay another company say l, to do electrical installation. In these kinds of contracts, company l, may or may not do the electrical installation since there is no promise binding it to the work. On the other hand company k will only meet all the requirements of the promise if the work has been done successfully.
Contracts may also be classified depending on the parties involved. A good example is the public-private partnership contracts. These kinds of contracts are some of the most complex contracts and an advocate must be present to do all the necessary interpretations of the contract terms and conditions.
The public normally gains directly from the private sectors’ investments as the private sector gains from its services and the business they offer to the public.
The leasing contracts
These kinds of contracts are very useful to organizations as it gives them total authority over all the items they own be it cars or any kind of investments. They are also very complex and they require guidance from advocates so as not to contradict the states constitution or set regulations.