in 150 - 200 words summarize and rephrase this article and get one sentence the most take away and one-sentence criticis

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in 150 - 200 words summarizeand rephrase this article and getone sentence the most takeaway and one-sentencecriticism from this article
Every Type of Contract You Could Ever PossiblyEncounter
The specific terms and conditions can take a contract in so manydifferent directions. However, when the final agreement is madeofficial, the contract, whether it be written or oral, will fallinto a specific category.
As you maneuver your contract management strategy foryour business, it’s important to pick out any and all types youmight encounter to maximize contract performance, preparedness,organization, and compliance.
Types of contracts
The type of contract being used in an agreement can refer to thestructure of the document, details of compensation, requirements tobe legally enforceable, or the associated risks. The contractslisted below are not all comparable to one another and can’t all beused interchangeably.
As promised, here is a complete list of every type of contractyou could ever possibly encounter.
Fixed-price contract
Fixed-price contracts, also known as lump sum contracts, areused in situations where the payment doesn’t depend on theresources used or time expended. With fixed-price contracts,sellers will estimate the total allowable costs of labor andmaterials and perform the action specified by the contractregardless of the actual cost. Because of this, the fixed pricepresented in the contract usually includes some wiggle room in caseunexpected costs occur.
The seller is assuming a certain amount of risk by using afixed-price contract, so some will decide to present a range ofprices instead of one dollar amount.
These types of contracts typically include benefits for earlytermination (meaning the duties were fulfilled) and penalties formissing deadlines. This common practice ensures that the agreement,or performance of action, or whatever the contract’s subject mattermay be, is performed on time.
When entering a deal that will use a fixed-price contract, beprepared for the contract creation and approval process to take abit longer than usual. To make sure they account for all time andresources accurately, sellers will be extra careful in determiningthe price.
Fixed-price contracts are most commonly used for constructioncontracts. Contractors will decide to use a fixed-price contractbecause the simplicity can result in buyers maybe paying a higherprice up front to avoid the hassle of tallying up the actual cost.However, that initial estimate can be hard to reachaccurately.
Cost-reimbursement contract
With a cost-reimbursement contract, the final total cost isdetermined when the project is completed or at anotherpredetermined date within the contract’s time frame. Before theproject is started, the contractor will create an estimated cost togive the buyer an idea of the budget. They will then providepayment for the incurred costs to the extent that has beendescribed in the contract.
The purpose of setting this expectation with cost-reimbursementcontracts is to establish a ceiling price that the contractorshouldn’t exceed without the approval of the buyer. At the sametime, if that ceiling is reached, the contractor can stop work.
Cost-plus contract
Also used for construction projects, a cost-plus contract is atype of cost-reimbursement contract for situations where the buyeragrees to pay the actual cost of the entire project, includinglabor, materials, and any unexpected expenses.
The word “plus” refers to the fee that covers the contractor’sprofits and overhead. In these agreements, the buyer agrees to paythat extra amount and expects the contractor to deliver on theirpromise.
When using a cost-plus contract, the buyer is usually able tosee the entire list of expenses so they know what they’re payingfor. They also will typically include a maximum price so they havean idea of what the most-expensive-case scenario might looklike.
Contractors will use cost-plus contracts if the parties don’thave much wiggle room in the budget or if the cost of the entireproject can’t be estimated properly beforehand. Some of thesecost-plus contracts might limit the amount of reimbursement, so ifthe contractor makes an error or acts negligently, the buyer won’thave to pay for their mistakes.
Contractors will decide to use cost-plus contracts because theyget flexibility to make changes throughout the project and thebuyer gets the exact value they paid for. However, it can befrustrating to have the final price up in the air and getting thatnumber requires extensive attention to detail.
Time and materials contract
A time and materials contract is like a cost-plus contract, buta little more straightforward. In these deals, the buyer pays thecontractor for the time spent to complete the project and thematerials used in the process.
Time and materials contracts are also used in situations whereit’s not possible to estimate the size of the project or if therequirements for completion are expected to change.
As a buyer, your money will be out toward the material costs andthe rate you are paying the workers for their time. At the start ofthe process, you will likely have to come to a mutual agreement onthe price of materials, including a markup rate and hourly ratesfor labor.
Time and material contracts require logging of everythinghappening on the work site, most importantly the hours being workedand materials being used. Paying close attention to those detailswill help the contractor and buyer come up with the most accurateestimate of the final total cost.
Contractors will use time and materials contracts because itsimplifies the negotiation process and it’s easy to adjust if therequirements of the project change. A downside to this is thattracking time and managing materials is tediouswork.
Unit price contract
With a unit price contract, the total price is based on all ofthe individual units that make up the entire project. When usingthis type of contract, the contractor will present the buyer withspecific prices for each segment of the overall project and thenthey will agree to pay them for the amount of units needed tocomplete it.
The word “unit” in these contracts can refer to time, materials,or a combination of both. While the parties can estimate or makeguesses, the actual number of units typically can’t be specified atthe beginning of the project.
Say you are making a deal with someone to repave your driveway.It’s hard to tell how much cement you’ll need exactly, but thecontractor says it costs $1,000 for each truckload of supplies andassociated labor. So to redo your entire driveway, you would needto agree to pay $1,000 per unit. And if it took three units tocomplete the entire project, you would have to pay the contractor$3,000.
Unit price agreements make for easy-to-understand contracts, buton the side of the contractor, it can be easy for buyers to compareprices with their competitors and cause them to lose somebusiness.
Bilateral contract
A bilateral contract is one in which both parties make anexchange of promises to perform a certain action. The promise ofone party acts as the consideration for the promise of the otherand vice versa.
With bilateral contracts, both parties assume the role ofobligor and obligee, meaning they both have contractual duties toperform and they both are expecting something of value aswell.
Bilateral contracts are most commonly used in sales deals, whereone party promises to deliver a solution and the other partypromises to pay for it. There is a reciprocal relationship here asthe obligation to pay for a solution is correlated with theobligation to deliver the solution. If the buyer doesn’t pay or theseller doesn’t deliver, a breach of contract hasoccurred.
The key element of bilateral contracts lies in the exchange ofsomething of value for another item of value, which is known asconsideration. If only one party is offering something of value,this is known as a unilateral contract.
Unilateral contract
Unilateral contracts are agreements where a party promises topay another after they have performed a specified act. These typesof contracts are most often used when the offeror has an openrequest that someone can respond to, fulfill the act, and thenreceive the payment.
Unilateral contracts are legally binding, but legal issuesusually don’t come up until the offeree claims they are eligiblefor money tied to certain actions they’ve performed and the offerorrefuses to pay the offered amount of money. Courts will decidewhether or not the contract was breached depending on how clear thecontract terms were and if the offeree can prove they are eligiblefor payment based on the facts in the agreement.
Examples of situations where unilateral contracts are usedinclude open requests where anyone can respond to a request, and inthe case of insurance policies. In those contracts, the insurerpromises to pay if something occurs that was included in the termof the contract. So essentially, the insurance company paysthe client if they are covered for the situation theyencountered.
Implied contract
An implied contract is an agreement that exists based on theactions of the involved parties. Implied contracts are not writtendown, and they might not even be spoken either. The agreementsimply ensues once the parties take the designated action thatkickstarts the contracts.
An example of an implied contract is a warranty on a product.Once you buy a product, a warranty goes into effect that it shouldwork as expected and presented. This contract is implied because itwent into effect when someone took a particular action (buying aproduct) and it might not have been written downanywhere.
Express contract
An express contract is a category of contracts entirely. Inthese types of agreements, the exchange of promises includes bothparties agreeing to be bound by the terms of the contract orally,in writing, or a combination of both.
Express contracts are often known to be the opposite of animplied contract, which, as a refresher, starts an agreement basedon the actions of the parties involved. With express contracts, allterms, conditions, and details of the agreementare expressed (get it?) by writing themdown, saying them out loud, or both.
When two types of contracts are compared, it often means thatthe parties involved in the agreement can decide which one to use.This is not the case for express and implied contracts. The natureof the agreement determines that for you.
Simple contract
A simple contract is a contract made orally or in writing thatrequires consideration to be valid. Again, consideration is theexchange of one thing for another and can be anything of value,including time, money, or an item.
Simple contracts are the opposite of contracts under seal, whichdo not require any consideration and have the seal of the signerincluded, meaning they have to be in writing. These contracts areofficially executed once they are signed, sealed, anddelivered.
While simple contracts require consideration, they don’t have tobe express contracts to be legally binding. The agreement ina simple contract can be implied as well.
Unconscionable contract
An unconscionable contract refers to an agreement that is soobviously one-sided and unfair to one of the parties involved thatit can’t be enforceable by law. If a lawsuit is filed regarding anunconscionable contract, the court will likely rule it to be void.No damages are paid, but the parties are relieved of theircontractual obligations.
If one or multiple of those events occurs when making anagreement, the contract is null and void and neitherparty is responsible for their end of the deal.
Adhesion contract
An adhesion contract, also known as a standard form contract, issort of a “take it or leave it” situation. In these agreements, oneparty typically has more bargaining power than the other. When theofferor presents the contract, the offeree has little to no powerto negotiate the terms and conditions included. This is contrastedfrom situations where the offeree can return a counteroffer to theoriginal offeror in hopes of starting negotiations andreaching an agreement they both find suitable.
This lack of negotiation isn’t done with bad intentions. In thecase of adhesion contracts, the offeror is typically someone whooffers the same standard terms and conditions to all of theirofferees. Every contract is identical.
For example, if you were buying insurance, the agent would drawup the contract, the way they do with every other client, and youwould either accept or deny the terms. It’s not likely you’ll beable to negotiate a new contract that you prefer more.
Adhesion contracts must be presented as take it or leave it tobe enforceable. Because if one party holds more bargaining power inany other situation, that could potentially be seen as anunconscionable contract. It’s easy for that line to be blurred,causing adhesion contracts to be placed under scrutiny quiteoften.
Aleatory contract
Aleatory contracts explain agreements where parties don’t haveto perform their designated action until a triggering event occurs.Essentially, aleatory contracts state that if something happens,then the action is taken.
Again, this type of contract is typically used in insurancepolicies. For example, your provider doesn’t have to pay you untilsomething happens, like a fire that causes damage to yourproperty.
The events that demand action described in an aleatory contractare ones that can’t be controlled by either party. Risk assessmentis an important part of creating aleatory contracts so both partiesknow the likelihood of that event occurring.
Be ready for anything
Your business might not encounter each and every one of thosecontract types, but it’s your responsibility to be prepared for anythat might come your way. After reviewing all of those examples,familiarize yourself with the contracts that your business islikely to encounter. An extra layer of preparedness neverhurt.