Contract

Contract has different meaning based on the context or the legal system.
Generally, contract is An agreement between private parties creating mutual
obligations enforceable by law. The basic elements required for the agreement
to be a legally enforceable contract are: mutual assent, expressed by a valid offer
and acceptance; adequate consideration; capacity; and legality. Other
commentators described contract as a contract is a written or expressed
agreement between two parties to provide a product or service. There are
essentially six elements of a contract that make it a legal and binding document.
However, the Jordanian legislature does not requires the contract to be written
except in specific cases stipulated by law.
Therefore, contract is considered as an agreement with specific terms between
two or more persons or entities in which there is a promise to do something in
return for a valuable benefit known as consideration. Since the law of contracts
is at the heart of most business dealings, it is one of the three or four most
significant areas of legal concern and can involve variations on circumstances and
complexities.

Types of contracts

Consensual Contract

A consensual contract is a contract that arises from the mere consensus of the
parties. It does not require the performance of any formal or symbolic acts to fix
the obligation. In other words, A consensual contract is a contract that is founded
on the mere unanimous agreement of interested parties and doesn't need to be
implemented through an official procedure.

Formal Contract

A formal contract is a written signed contract and may need certain procedures
for validity purposes.

Bilateral Contract

The most popular type of contract is “bilateral contract”. An agreement formed

by an exchange of a promise in which the promise of one party is consideration
supporting the promise of the other party.
A bilateral contract is distinguishable from a unilateral contract, a promise made
by one party in exchange for the performance of some act by the other party.
The party to a unilateral contract whose performance is sought is not obligated
to act, but if he or she does, the party that made the promise is bound to comply
with the terms of the agreement. In a bilateral contract both parties are bound
by their exchange of promises.
Both parties to a bilateral contract make promises. With respect to the promise
in issue, the party making the promise is the promisor and the other party is the
promisee. The legal detriment incurred by the promisee consists of a different
promise by him or her to do something or refrain from doing something that he
or she was not previously legally obligated to do or to refrain from doing. This
legal detriment constitutes consideration, the cause, motive, or benefit that
induces one to enter into a contract. Consideration is an essential component of
a contract. Traditionally, courts have distinguished between unilateral and
bilateral contracts by determining whether one or both parties provided
consideration and at what point they provided the consideration. Bilateral
contracts were said to bind both parties the minute the parties exchange
promises, as each promise is deemed sufficient consideration in itself. Unilateral
contracts are said to bind only the promisor and do not bind the promisee unless
the promisee accepts by performing the obligations specified in the promisor's
offer. Until the promisee performs, he or she has provided no consideration
under the law.
For example, if someone offered to drive you to work on Mondays and Tuesdays
in exchange for your promise to return the favor on Wednesdays and Thursdays,
a bilateral contract would be formed binding both of you once you provided
consideration by accepting those terms. But if that same person offered to pay
you $10 each day you drove him to work, a unilateral contract would be formed,
binding only upon the promisor until you provided consideration by driving him
to work on a particular day.
Modern courts have de-emphasized the distinction between unilateral and
bilateral contracts. These courts have found that an offer may be accepted either
by a promise to perform or by actual performance. An increasing number of
courts have concluded that the traditional distinction between unilateral and
bilateral contracts fails to significantly advance legal analysis in a growing number
of cases where performance is provided over an extended period of time.
Suppose you promise to pay someone $500.00 to paint your house. The promise
sounds like an offer to enter a unilateral contract that binds only you until the
promisee accepts by painting your house. But what constitutes lawful
"performance" under these circumstances? The act of beginning to paint your
house or completely finishing the job to your satisfaction?
Most courts would rule that the act of beginning performance under these
circumstances converts a unilateral contract into a bilateral contract, requiring
both parties to fulfill the obligations contemplated by the contract. However,
other courts would analyze the facts of each case so as not to frustrate the
reasonable expectations of the parties. In neither of these cases are the legal
rights of the parties ultimately determined by the courts by applying the concepts
of unilateral and bilateral contracts.
In still other jurisdictions, courts have simply expressed a preference for
interpreting contracts as creating bilateral obligations in all cases where there is
no clear evidence that a unilateral contract was intended. The rule has been
stated that in case of doubt an offer will be presumed to invite the formation of
a bilateral contract by a promise to perform what the offer requests, rather than
the formation of a unilateral contract commencing at the time of actual
performance. The bottom line across most jurisdictions is that as courts have
been confronted by a growing variety of fact patterns involving complicated
contract disputes, courts have shifted from rigidly applying the concepts of
unilateral and bilateral contracts to a more ad hoc approach.
Mutuality of obligation must exist in an enforceable bilateral contract, and this
involves the concept of reciprocity. A cannot enforce B's promise unless A's
promise entails a legal detriment, and B can enforce A's promise only if B's
promise involves a legal detriment.
If a minor enters a bilateral contract with an adult that is unenforceable due to
the minor's age, the adult party cannot assert absence of mutuality as a defense
if the minor sues to enforce the contract. This principle applies to any situation
where the law grants a particular party a privilege to avoid a contract because of
his or her status.
 Unilateral Contract

A contract in which only one party makes an express promise, or undertakes a

performance without first securing a reciprocal agreement from the other party.
In a unilateral, or one-sided, contract, one party, known as the offeror, makes a
promise in exchange for an act (or abstention from acting) by another party,
known as the offeree. If the offeree acts on the offeror's promise, the offeror is
legally obligated to fulfill the contract, but an offeree cannot be forced to act (or
not act), because no return promise has been made to the offeror. After an
offeree has performed, only one enforceable promise exists, that of the offeror.
A unilateral contract differs from a Bilateral Contract, in which the parties
exchange mutual promises. Bilateral contracts are commonly used in business
transactions; a sale of goods is a type of bilateral contract.
Reward offers are usually unilateral contracts. The offeror (the party offering the
reward) cannot impel anyone to fulfill the reward offer. An offeree can sue for
breach of contract, however, if the offeror does not provide the reward after the
offeree has fulfilled the contract's requirements.

Donation Contract

Donation is the act by which the owner of a thing voluntarily transfers the title
and possession of the same from himself to another person, without any
consideration; a gift. A donation is never perfected until it is has been accepted,
for the acceptance is requisite to make the donation complete. The person
making the gift is called the donor and the person receiving the gift is called the
donee. If made to a qualified non-profit charitable, religious, educational or
public service organization, it may be deductible as a contribution in calculating
income tax.

Continuous Contract

A continuous contract is a reinsurance contract that does not have a fixed

contract end date, and which will continue to be renewed and be in effect until
one of the parties in the contract terminates it.

Fixed-term Contract

A fixed-term contract is a contractual relationship between an employee and an

employer that lasts for a specified period. These contracts are usually regulated
by different countries' labour laws, to ensure that employers still fulfill basic
labour rights regardless of a contract's form, particularly unjust dismissal.

Adhesion Contract

A type of contract, a legally binding agreement between two parties to do a

certain thing, in which one side has all the bargaining power and uses it to write
the contract primarily to his or her advantage.
An example of an adhesion contract is a standardized contract form that offers
goods or services to consumers on essentially a "take it or leave it" basis without
giving consumers realistic opportunities to negotiate terms that would benefit
their interests. When this occurs, the consumer cannot obtain the desired
product or service unless he or she acquiesces to the form contract.
There is nothing unenforceable or even wrong about adhesion contracts. In fact,
most businesses would never conclude their volume of transactions if it were
necessary to negotiate all the terms of every Consumer Credit contract.
Insurance contracts and residential leases are other kinds of adhesion contracts.
This does not mean, however, that all adhesion contracts are valid. Many
adhesion contracts are Unconscionable; they are so unfair to the weaker party
that a court will refuse to enforce them. An example would be severe penalty
provisions for failure to pay loan installments promptly that are physically hidden
by small print located in the middle of an obscure paragraph of a lengthy loan
agreement. In such a case a court can find that there is no meeting of the minds
of the parties to the contract and that the weaker party has not accepted the
terms of the contract.

Contract of adhesion, also referred to as a boilerplate contract, is a contract

that is generally drafted by one party who has greater bargaining power and
signed by another party who has lesser bargaining power.
Since there is such disparity between the parties, the weaker party usually
adheres to the initial contract since it is unable to negotiate the original terms
of the deal. This is also sometimes referred to as a “take it or leave it” situation.
Clearly, the party with greater bargaining power has more overall power in the
contract and can usually freely negotiate any terms it wants with the other
party knowing that the other party will agree upon those terms.
While this type of contract would seem unfair or even unenforceable, there is
nothing wrong with entering into such an agreement. In fact, this type of contract
is more common than one would think. If businesses spent time negotiating every
single deal, they wouldn’t get any work done.
Adhesion contracts can be used in a variety of industries. However, they are
most common in the following types of deals:
１. Property leases
２. Electricity and Gas
３. Telecommunications
４. Mortgages
５. Insurance policies
６. Car purchases or rentals
７. Contracts to borrow money or property