0Following is the classification of contracts according to their formation:
(a) Unilateral Contracts: A unilateral contract is a one-sided contract in which only one party has to perform his obligation. In such contracts, promise on one side is exchanged for an act on the other side. After the formation of a unilateral contract, only one party remains liable to perform his obligation because the other party has already performed his obligation by doing some act. The unilateral contracts are also known as contracts with executed consideration.
Example 1.15: A promised to pay Rs. 100 to anyone who finds his lost dog. B found the dog and returned it to A. It is a contract which comes into existence when the dog is found. Now, only A has to perform his obligation by paying Rs. 100 to B, because B had already performed his part of obligation by finding the dog. Here A’s promise to pay was for B’s act of finding the dog.
(b) Bilateral Contracts: A bilateral contract is a two-sided contract in which both the parties have to perform their respective obligations, i.e., at the time of formation of a contract, 1 ? the obligations of both the parties are outstanding. In such contracts, promise on one side is exchanged for a promise on the other. The bilateral contracts are also known n as-contracts with executor consideration.
Example 1.16: A promised to paint a picture for B and B promised to pay Rs. 2,000 to A. It is a bilateral contract as there is exchange of promise, and obligations of both the parties are outstanding at the time of formation of contract.
(c) Executed Contracts: When a contract has been completely performed, it is termed as executed contract, e., it is a contract where, under the terms of a contract, nothing remains to be done by either party.
Example 1.17: A agreed to sell his colour TV set to B for Rs. 5000. B paid the price and A delivered the television set. It is an executed contract as both the parties have performed their obligations.
(d) Executory Contracts: Executory contract is that where under the terms of a contract something remains to be done by the parties. In other words, where one or both the parties to the contract have still to perform their obligations in future, the contract is termed as executory contract.
Example 1.18: A agreed to sell his car to B for Rs. 50,000. Car was to be delivered by A on 15th of next month and the price was to be paid by B on 25th of the same month. It is an executory contract as both the parties have to perform their respective obligations. If the car is delivered by A on 15th of the month, the contract would still be executory till the price is paid by B on 25th of that month.
