There are six types of contracts, which can be broken down into three pairs of related terms. The first pair is bilateral/unilateral contracts. The second is formal/informal contracts. The third type is express/implied-in-fact contracts.
Bilateral and unilateral contracts are distinguished by the relationships between the offeror and offeree. In a bilateral contract, both parties must agree to the terms of the contract before it goes into effect. In a unilateral contract, the offeror presents terms to the general public. A unilateral contract only becomes binding once a second party seeks to collect on the contract.
A unilateral contract is formed if Megan puts up a poster offering a reward for her lost wallet, while a bilateral contract would be formed if Megan offered Rosemary $50 to find her wallet.
Although formal and informal contracts were both once common, informal contracts have largely replaced formal contracts. A formal contract is any contract which is required by law to take a specific form. An informal contract is any other type of contract.
An express contract is formed when both parties state what they intend to do while the contract is being formed. An implied-in-fact contract is formed by the actions of the parties. An implied contract does not require any verbal statement by the parties to be put into effect.