Ohio Surety Bail Agent Practice Exam

The classification of a contract that does not require formal documentation is informal contracts. An informal contract, also known as a simple or implied contract, can be created without the need for written documents or signatures. These types of contracts rely on the parties' actions and mutual understanding rather than a structured format. For example, if you go to a restaurant, you are engaging in an informal contract when you order food, as it is understood that you will pay for the meal upon receiving it, yet no formal written agreement is drawn up. In contrast, formal contracts require a specific format and often must be in writing to be enforceable, such as real estate agreements or loans. Bilateral contracts involve a mutual exchange where both parties agree to fulfill certain obligations, but they typically require some form of documentation to clarify these shared responsibilities. Executed contracts refer to agreements that have been fully performed by all parties involved, and while they could be informal, the executed status generally comes after a contract was created, often with some level of formal documentation.