Theme 2. Classifying international contracts

Multicriteria classifying

Classifying on the contract’s subject

Multicriteria classifying

For purposes of analysis, legal scholars have classified contracts in many different ways. The most common classifications of contracts include: "express"and "implied" contracts; "void" and "voidable" contracts; and "enforceable"and "unenforceable" contracts.

Express and Implied Contracts

Express contracts, which may be written or oral, are contracts in which the terms of the agreement made are explicitly stated: when a valid offer is accepted, an express contract has been created. Implied contracts, usually referred to as "implied in fact," are contracts that are formed by the behavior of the parties in the absence of directly negotiating the specifics of the transaction. Making an appointment with a repairman to have a broken washing machine fixed is an implied contract--the repairman may reasonably expect to be paid for making the repairs. The term "implied in fact" is used to distinguish this type of implicit arrangement from an "implied in law" contract, or "quasi-contract." A quasi-contract is not an actual contract; it is a non-binding legal mechanism used in special circumstances to prevent one party from beingseverely harmed or unjustly enriched by an implicit arrangement.

Void and Voidable Contracts

The term "void contract" is an oxymoron--a contract held to be void does notexist under law. In other words, although two parties may have come to an agreement, it is not recognized as a legal contract. Perhaps the simplest example of a void contract is a contract formed in which one party agrees to perform an illegal act. A contract that is illegal in part may be void in that respect, however, it is still a valid contract if the deletion of the illegal portion of the contract does not defeat the purpose of the broader agreement. Agreements in which an essential feature of a valid contract is lacking, are void contracts as well. Voidable contracts are contracts that may be canceled by one of the two parties involved. A contract may be voidable for various reasons, but in most cases a voidable contract provides for one of the parties to withdraw from the agreement without penalty.

Enforceable and Unenforceable Contracts

A contract may be enforceable or unenforceable. An enforceable contract is one for which a legal remedy is offered in the event that the contract is not fulfilled. A contract may be unenforceable when certain statutory requirementshave not been met. For example, an oral contract to buy land would not be enforceable because the Statute of Frauds requires such an agreement to be in writing. Similarly, statutes of limitations, which limit the length of time available for legal action, may apply to contracts of certain types and renderthem unenforceable after a certain period of time.

Contracts also are divided into:

I Contracts dependent for their validity upon their form alone, or strictly formal contracts. These are:

- Contracts of record. The obligations which are styled "contracts of record" are: Judgments of courts of record, whether entered by consent or rendered in invitum. In the latter case, however, the obligation is quasi contractual, and not contractual; recognizances, which are obligations, entered into before a court of record, to do or forbear from doing a certain thing under a penalty.

- Contracts under seal. In such contructs the recitals are conclusive against the partie: they are said to be estopped thereby; it merges a prior simple contract; a right of action is not barred until the lapse of a longer time than in case of simple contracts; no consideration is necessary.

II. Simple or parol contracts, which may be divided into -

-  Such contracts  as are dependent for their validity both on their form and on the presence of consideration. These are contracts not under seal, nor of record, but which are required by law to be in writing, either with or without a particular form.

-  Such contracts  as are dependent for their validity upon the presence of consideration alone, no form at all being required.

There are two classes of contracts which at common law depend for their validity upon their form alone. These are contracts under seal and contracts of record. They are strictly formal contracts. All other contracts are called "simple" or "parol" contracts, and depend for their validity upon the presence of consideration. Some of these contracts are also required to be in writing, as in the case of bills of exchange and promissory notes, in the case of which a particular form is also required, and contracts within the statute of frauds; so that they depend for their validity upon their form as well as upon the presence of consideration. Simple contracts, not required by the common law or by statute to be in writing, may be made by word of mouth, or by conduct, as we have explained in treating of offer and acceptance. They need no particular form, but depend for their validity upon the presence of consideration alone.

All of these contracts, except contracts under seal and contracts of record, are called "simple" or "parol" contracts. The word "parol" strictly means "by word of mouth," and excludes writing; but the term is applied to all simple contracts, whether they are merely oral or required to be in writing. They all require consideration, the only distinction being in the fact that some must be in writing.

We shall now deal with the contracts of record and contracts under seal, and in following chapters with those forms which are superimposed upon simple contracts, and with consideration, the requisite common to all simple contracts.