EXPRESS CONTRACT AND IMPLIED CONTRACT - DEFINITION, REQUIREMENTS, CHARACTERISTICS AND DIFFERENCES

 Ø EXPRESS CONTRACT:

 

Express contract is a binding agreement with specific terms that is made in a legal manner either verbally or in writing. The terms of an agreement are expressly communicated between the parties in an express contract, eliminating any room for doubt or ambiguity.

 

REQUIREMENTS OF AN EXPRESS CONTRACT:

 

An express contract must meet the same fundamental requirements as any other contract. For something to have legal force such as an express contract must contain all of the elements of a contract, such as;

 

• 1.  Offer: There must have been a proposal from one party to the other. 
• 
  
• 2. Acceptance: The offer had to be unambiguously accepted by the   counterparty.
•  
• 3. Consideration: The contract must be beneficial to both parties. Hence     there must be a consideration.
•  
• 4.  Intention to be legally bound: A contract is only enforceable if all parties agree to it being so.
• 
  
• 5.  Contractual capacity: all parties must have the capacity to enter into a contract in the first instance.

 

Ø IMPLIED CONTRACT:

 

An implied contract is a non-verbal and unwritten and still legally binding contract that exists based on the behavior of the parties involved or on a set of circumstances. In other words, we create implied contracts When we behave a certain way, That don't have signatures, aren't recorded, can't be verbally confirmed.

Example of an implied contract is when you eat in a hotel. It is assumed that you will pay for your food when you have finished eating So, while there’s no explicit offer from the Hotel owner, or acceptance from you before you sit down, you both act in a way that implies this is what will happen.

 

CHARACTERISTICS OF IMPLIED CONTRACTS:

 

1.  The distinguishing feature of an implied contract is that while there is no exchange of words, either orally or in writing, that specifies the agreement, it can be reasonably inferred from the parties’ behavior or surrounding circumstances that the parties have a tacit understanding of having formed an agreement.

 

2.  A general example is when one party accepts some benefit from another party, knowing that the providing party expects to be paid for the provided benefit.

 

3.  Implied contracts are just as legally binding and enforceable as express contracts. However, enforcement of implied contracts is sometimes difficult since the contract’s specific terms have not been expressed.

 

In addition, the law in many jurisdictions requires a written contract for some agreements, such as land sales or contracts with an extremely high monetary value, to be enforceable.

 

KINDS OF IMPLIED CONTRACT:

 

Two categories of implied contracts are defined by law: those implied-in-fact and those implied-in-law. They differ based on how the agreement came about. Basically, an implied-in-fact contract is one that can be proved by looking at the party’s behavior, if it looks like they were intentionally acting pursuant to a contract, it's a contract. By contrast, an implied-in-law contract involves an ethical determination by a judge that one party should not get something for nothing.

 

1. Implied-in-Fact Contracts:

 

A contract that's implied in fact is formed when two parties conduct themselves as if an agreement were in place.

 

2. Implied-in-Law Contracts:

 

Implied-in-law contracts, also called quasi-contracts, are the last resort for judges who are faced with a situation where one party is taking advantage of the other. Courts use this doctrine to compensate someone for services performed, not because one party offered and even if neither party intended to enter into a contract, but because the person who received goods or services would be unfairly enriched by not paying. 

 

DIFFERENCE BETWEEN AN EXPRESS AND IMPLIED CONTRACT:

 

The main difference between an express contract and an implied contract is that

 

1.  An express contract involves clear communication between both parties about what the offer is and that it will be accepted. Meanwhile, an implied contract is inferred by behavior and actions, without explicitly stating its terms.

2. Express contract may be proved by express words while the implied contract is proved by the conduct of the parties and circumstances surrounding the contract.