Types of contracts you need to know

Understanding the types of contract is essential for anyone working with clients, partners, or service providers.

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Whether you’re a freelancer, a startup, or a growing business, knowing the right contract types helps you avoid legal risks and build stronger professional relationships.

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Written contracts

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This is the most common and secure type of contract agreement. Written contracts clearly outline responsibilities, deadlines, payment terms, and legal conditions.

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They are used for employment, vendor services, and long-term projects. Among all types of legal contracts, this one offers the most clarity and enforceability.

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Verbal agreements

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Verbal agreements are informal contract types made through spoken words. While some jurisdictions accept them as valid, they’re risky without proof.

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Verbal contracts might work for one-time or low-value deals, but most businesses avoid them due to limited protection in case of dispute.

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Implied contracts

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Implied contracts are formed through actions rather than words. For example, ordering food at a restaurant implies an agreement to pay.

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This type of contract can be useful in daily transactions, but it lacks the legal strength of written formats. It’s important to avoid relying on implied terms in business settings.

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Fixed-term contracts

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A fixed-term contract sets a clear start and end date. It’s one of the most common types of contracts in freelance work, consulting, and project-based roles.

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Once the term ends, the contract expires unless both parties agree to renew it. These contracts are ideal for defining scope and duration upfront.

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Evergreen contracts

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Evergreen contracts automatically renew after the initial period unless canceled. They’re widely used in SaaS, vendor subscriptions, and licensing.

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Among the various contract types, evergreen agreements help streamline renewals — but they require attention to cancellation terms and billing cycles.

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Unilateral and bilateral contracts

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In a unilateral contract, only one party promises something (like offering a reward). A bilateral contract involves mutual obligations — for example, payment in exchange for services.

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Bilateral agreements are the most common types of legal contracts in business, ensuring both sides are equally committed.

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Digital contracts

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Today, many professionals use digital contracts for speed, security, and convenience. With tools like online contract signing, it’s easy to send, sign, and manage agreements from anywhere.

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This modern type of contract saves time and helps close deals faster without printing or mailing.

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Need to send or sign a contract online?

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Use DocuChain to create, manage, and eSign any type of contract – fast, secure, and free. Get started here.