Top 10 Types of Contracts in Business Law Explained: Meaning, Features & Examples (2025)

In today’s fast-paced commercial world, understanding the types of contracts in business law is essential for every entrepreneur and business professional. Contracts are the foundation of all transactions and partnerships, ensuring that businesses operate smoothly and disputes are minimised.

Whether you’re forming a startup, running an SME, or managing a large corporation, being aware of the types of business contracts helps protect your rights and maintain compliance under contract law in India.

Top 10 Types of Contracts in Business Law

This detailed guide will explain the top 10 types of contracts in business law, their meanings, features, and practical examples, especially relevant to Indian businesses in 2025.

1️. Express Contract

• Meaning: An express contract is created when terms are clearly stated, either orally or in writing.
  
• Features:
  
  • No hidden clauses.
    
  • Direct communication and explicit promises.
    
• Example: A written contract between an Indian e-commerce business and a logistics partner for one-year delivery services.

2️. Implied Contract

• Meaning: An implied contract arises from actions or conduct rather than spoken or written words.
  
• Features:
  
  • Formed naturally during transactions.
    
  • Protected under contract law in India.
    
• Example: Buying goods from a supermarket implies you agree to pay for them.

3️. Unilateral Contract

• Meaning: Only one party makes a promise that becomes binding once another party performs a certain action.
  
• Features:
  
  • One-sided promise initially.
    
• Example: Announcing a ₹1 lakh reward for finding a lost company laptop.

4️. Bilateral Contract

• Meaning: In a bilateral contract, both parties make mutual promises to each other.
  
• Features:
  
  • Common in business law contracts worldwide.
    
• Example: A supplier agrees to provide raw materials, and a manufacturer promises to pay on delivery.

5️. Executed Contract

• Meaning: All parties have completed their contractual obligations.
  
• Features:
  
  • The contract is fully performed.
    
• Example: Payment received after delivering a completed marketing project.

6️. Executory Contract

• Meaning: One or both parties still have obligations to perform.
  
• Features:
  
  • Ongoing duties or future commitments.
    
• Example: Multi-year service agreements signed by Indian software companies.

7️. Void Contract

• Meaning: A contract without legal effect; it is not enforceable by law.
  
• Features:
  
  • Treated as non-existent under contract law in India.
    
• Example: A contract to trade illegal goods.

8️. Voidable Contract

• Meaning: A valid contract that one party may cancel due to issues like fraud or coercion.
  
• Features:
  
  • Protects parties against unfair practices.
    
• Example: A franchise agreement signed under pressure or misrepresentation.

9️. Contingent Contract

• Meaning: Dependent on the occurrence of a future event.
  
• Features:
  
  • Conditional performance.
    
• Example: An insurance contract covering accidental damage.

10. Quasi-Contract

• Meaning: Not a real contract, but an obligation created by law to prevent unjust enrichment.
  
• Features:
  
  • No explicit agreement.
    
• Example: A company mistakenly pays a vendor twice; the vendor is legally required to return the excess amount.

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Why Knowing the Types of Contract in Business Law Matters

Understanding the types of contracts in business law helps you select the most suitable agreement for each business scenario. It also strengthens compliance under contract law in India, reduces the chance of disputes, and builds stronger relationships.

From express contracts to voidable contracts, each type serves a unique purpose and protects your business interests. As India’s startup and MSME sectors continue to grow, knowledge of these business law contracts becomes even more crucial.

ALSO READ – Top 10 MSME Business Ideas in India for 2025 (Low Investment, High Return)

Key Takeaways

• Contracts provide a legal framework for business agreements.
  
• There are various types of contracts in business law, each designed for specific situations.
  
• Understanding the types of business contracts helps in reducing risks and improving trust.

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Conclusion

Learning about the types of contracts in business law empowers you to operate safely and legally. Choosing the correct types of business contracts for each deal not only protects your company but also boosts credibility and long-term success.

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