1. Basics of ContractBasics of Contract
International Business LawInternational Business Law
• Hazem FoudaHazem Fouda

2. Classification of ContractsClassification of Contracts
What are the main classification of the contracts?What are the main classification of the contracts?
1.1. Bilateral or unilateral contract:Bilateral or unilateral contract:
• Bilateral contract:Bilateral contract: made by one party in return for amade by one party in return for a
promise made by another party “ both make promises”.promise made by another party “ both make promises”.
• Unilateral contract:Unilateral contract: promise offer is made by one partypromise offer is made by one party
in return for the performance of a specific act by otherin return for the performance of a specific act by other
party.party.
2.2. Executory & executed contracts:Executory & executed contracts:
• Executory contract:Executory contract: it’s not fully performed by one or allit’s not fully performed by one or all
parties.parties.
• Executed contract:Executed contract: it refers to contracts in which allit refers to contracts in which all
parties have completely carried out their parts ofparties have completely carried out their parts of
contract.contract.

3. 3.3. Valid, Void, Voidable, & Unenforceable contract:Valid, Void, Voidable, & Unenforceable contract:
• Valid contract:Valid contract: that contains all the essential elementsthat contains all the essential elements
of a contract “ offer, acceptance, consideration,of a contract “ offer, acceptance, consideration,
competent parties, & legal purpose”.competent parties, & legal purpose”.
• Void contract:contract: it’s not legal & has no legal effect “ noit’s not legal & has no legal effect “ no
party can enforce it against the other in court law”.party can enforce it against the other in court law”.
• Voidable contract:Voidable contract: it’s completely enforceable againstit’s completely enforceable against
all parties.all parties.
• Unenforceable contract:Unenforceable contract: it’s legal in all respects butit’s legal in all respects but
fails to meet some requirements of the law “ a court willfails to meet some requirements of the law “ a court will
not enforce it against any party”.not enforce it against any party”.

4. 4.4. Formal& Informal contracts:Formal& Informal contracts:
• Formal contract :Formal contract : it’s written contract prepared withit’s written contract prepared with
certain formalities.certain formalities.
• Informal contract:Informal contract: it doesn’t required any particularit doesn’t required any particular
formalities “ parties are free to use any style offormalities “ parties are free to use any style of
language”.language”.
5.5. Express & Implied contract:Express & Implied contract:
• Express contract:Express contract: it’s one in which the agreement isit’s one in which the agreement is
specifically stated “oral or written” .specifically stated “oral or written” .
• Implied contract:Implied contract: it’s one in which the parties formit’s one in which the parties form
contract from their actions.contract from their actions.
• Contracts may be partially express & partially implied.Contracts may be partially express & partially implied.
• QQuasi contract:uasi contract: fictional contract created by courts.fictional contract created by courts.

5. How an OfferHow an Offer
Ends?Ends?
• An offer ends when it is accepted by an offeree.
• An offer may also ends by Lapse of time, Rejection,
Counteroffer, Revocation, Death or Insanity of the
offeror or offeree, Illegality, and Impossibility.
Let’s talk about point of the above in some details
separately.

6. Lapse of time:Lapse of time:
If the offer contains a fixed time limit, the offer
ends at that time. When no fixed time is stated,
the offer ends at the end of a reasonable time.
What is a “reasonable time” means, it depends
upon the circumstances in each case.
Rejection:Rejection:
An offer is ended by rejection when the offeree
refused the offer made by the offeror. The offeree
cannot later decide to accept the offer. The offer
doesn’t end, however, until the offeror receives
notice of the directly from the offeree.

7. Counteroffer:Counteroffer:
A counteroffer is an offer made by the offeree to
offeror the changing the terms of the original offer.
The counteroffer ends the original offer and replaces it
with the new offer. The two parties switch roles, if the
original offferor (now the offeree) accepts the
counteroffer, a legally binding agreement results.
Revocation:Revocation:
The offeror has the legal right to withdraw at any time
before it is accepted. Withdrawing an offer is known
as revocation. Revocation is possible even though the
offeror has promised to hold the offer open for a
stated period. The offeror may not be able to revoke
the offer, however, if an option exists.

8. An option is actually a contract in which the offeror
agrees to hold an offer open and irrevocable for a
certain time or until a certain date.
Death or Insanity:Death or Insanity:
If the offeror dies or becomes insane before the offer
is accepted by the offeree, the offer ends even though
the offeree does not know of the offeror’s death or
insanity.
The death or insanity of the offeree also terminates an
offer. Although death ends an offer, it does not
terminate a contract already formed before the death
of one of the parties.

9. Illegality:Illegality:
An offer ends if the offer itself becomes illegal
before it is accepted by the offeree.
Impossibility:Impossibility:
An offer ends if the offer becomes impossible to
carry out before the offeree accepts it.

10. Illegality:Illegality:
An offer ends if the offer itself becomes illegal
before it is accepted by the offeree.
Impossibility:Impossibility:
An offer ends if the offer becomes impossible to
carry out before the offeree accepts it.