ELEMENTS OF A CONTRACT

- Introduction and definition of contract

- Classification of contracts
- Essentials of a contract

A CONTRACT is an agreement between two or more competent parties to perform a

service, provide a product or commit to an act and is enforceable by law.

CLASSIFICATION OF CONTRACTS
1. As to ORIGIN

2. As to PARTICIPANTS

3. As to OBLIGATION STATUS

4. As to COMPLETION STATUS

5. As to FORM

6. As to LEGAL STATUS

AS TO ORIGIN:
 An EXPRESS contract is a bilateral or multilateral contract in which the promises
and assent of each party are expressed in speech or in writing.
 An IMPLIED contract is a unilateral contract where either the act of acceptance or
both the act of acceptance and the promise are inferred as a matter of fact from the
conduct or acts of the parties.
 A QUASI contract is implied by law on the theory that it would be unjust to allow
one person to accept the benefits of the labor or anything of value which belongs to
another without refunding it or paying him for it.

AS TO PARTICIPANTS:
 A TWO-PARTY contract is the common type in which only two parties are involved.
 A JOINT contract is one in which two or more parties merge, to a greater or less
extent, their interests to enter into a contract with another party or parties.
 A SEVERAL contract is one in which two or more persons enter into a contract as
promisors or promisees but keep their liability more or less separate.
  In JOINT AND SEVERAL, a plaintiff may sue the promisors either jointly or
severally.
 If he elects to sue jointly, however, he must sue all the promisors together in the
same suit.
 A THIRD-PARTY BENEFICIARY contract is one in which two parties enter into a
contract for the protection of the interests of a third person who is not a party to the
contract.

AS TO OBLIGATION STATUS:
 A BILATERAL contract is one in which one party agrees to perform or refrain from
performing some certain acts in return for which the other party agrees to perform
or refrain from performing certain acts.
 A UNILATERAL contract is one in which there is a promise by one party to perform
certain acts provided the other party does certain things, the acceptance to be
accomplished by the act.

AS TO COMPLETION STATUS:
 An EXECUTORY contract is one in which an obligation is assumed by one or both
parties to do or refrain from doing certain acts at some time in the future.
 An EXECUTED contract is one in which everything is done at the time of making the
contract and no obligation for future acts is assumed by either party.

AS TO FORM:
 A CONTRACT UNDER SEAL is one with a seal attached.
In jurisdictions which still recognize sealed contracts as superior to others, deeds,
bonds, and other contracts of major importance are executed under seal.
 A CONTRACTS OF RECORD are those which as a consequence of court judgements.
Unless the judgment is entered by mutual consent, these are strictly speaking,
actually quasi contracts.
 A SIMPLE OR PAROL contract is one which is less formal than a sealed contract.
 It may or may not be in some special form and may in some cases be written and in
others may be oral.

AS TO LEGAL STATUS:
 A VALID contract is one which is in full force and enforceable by court action.
 A VOID contract is one which has no status at law and is therefore not enforceable
by court action.
  A VOIDABLE contract is one which is binding on one party but may be either
binding or non-binding on the other party at his option.
 An UNENFORCEABLE contract is one which is valid in all respects except that it is
unenforceable through court action.

ESSENTIALS OF A CONTRACT
1. There must be two or more competent contracting parties.

2. There must be a mutual agreement on the part of all parties to the contract.

3. There must be a valuable consideration for each of the parties to the contract.

4. The obligations which the parties to the contract undertake must be for legal acts

5. The contract must be set forth according to the form and executed in the manner
prescribed by law.