2: According to Formation

According to formation, a contract has the following three kinds.

a: Express Contract: Express contract is one which is expressed in words spoken or

written. When such a contract is formed, there is no difficulty in understanding the
rights and obligations of the parties. In express contract, the parties directly state the
terms of the contract.

For example, A tells to B that he wants to sell his car and B informs A that he agrees to
buy the car, there is an express contract.

b: Implied Contract: An implied contract is made otherwise than by words spoken or

written. It arises from the acts, conduct of the parties, course of dealings or
circumstances. It arises when one person, without being requested to do so, renders
services under circumstances indicating that he expects to be paid for them, and the
other person, knowing such circumstances, accepts the benefit of those services.

For example, A went to a restaurant and took a cup of tea. It is an implied contract and A
will pay for it. Likewise, M, a shoe shiner starts polishing the shoes of W in his
presence, and W allows him to do so. It is an implied contract.
3: According to Performance

According to performance a contract is of the following two kinds.

a: Executed Contract: A contract is said to be executed when both the

parties have completely performed their obligations. It means that nothing
remains to be done by either party under the contract.

For example, A buys a book from B. A delivers the book and B pays the price. It
is an executed contract.

b: Executory Contract: In an executory contract something remains to be

done. In other words a contract is said to be executory when both the
parties to a contract have yet to perform their obligations.

For example, A agrees to teach B in May and B promises to pay Afg. 800 to A.
it is an executory contract because the promises are yet to be performed.
4: According to Parties

According to parties, a contract is of the following two kinds.

a: Unilateral Contract: In a unilateral contract only one party

makes a commitment. In other words, it is a contract where only one
party is bound but the other party chooses to be bound by it.

For example, A promises to pay Afg. 1000 to any one who finds his lost
bag. B finds the bag and returns it to A. It is a unilateral contract
which comes into existence when the bag is found.

b: Bilateral Contract: It is a contract where as soon as the

contract is made, both parties are bound by it.

For example, A promises to paint the picture for B and B promises to

pay Afg. 5000 to A.