Key Takeaways

  • An express contract spells out terms clearly, in writing or verbally, and is easier to enforce than implied agreements.
  • Implied contracts arise from conduct or circumstances, even when not formally stated.
  • Courts enforce both types of contracts, but express contracts provide stronger evidence of intent.
  • Implied contracts can be implied-in-fact (based on conduct) or implied-in-law/quasi-contracts (to prevent unfair benefit).
  • Choosing between express and implied contracts depends on context, formality of the deal, and the need for clarity.

The difference between implied and express contract is essentially as follows:

  • An express contract is one in which the terms and conditions are spelled out in the contract, either verbally or in writing. Once an express contract has been established and agreed upon, an identical implied contract cannot exist.
  • An implied contract is one in which the terms and conditions are inferred by the actions of the parties involved.

In an express contract, words, either written or verbal, are used to bring the contract to fruition, whereas an implied contract comes into existence as the result of actions. Sometimes, the age-old expression, “actions speak louder than words” has a lot of weight.

Either type of contract is viewed as legally binding insofar as the courts are concerned, as any contract is one that has been entered into willingly, by the involved parties via an offer and acceptance. With that said, it is obviously much easier to define and then enforce an express contract, particularly one that is in writing, as opposed to an implied contract.

More on Express Contracts

Express contracts are probably the ones we most commonly think of. An example of an express contract may be if you hire a website designer to design your business’s website. The terms and conditions are spelled out, including details such as deadlines and payment dates, both parties agree and sign the contract, and the work on building your new website begins.

Limitations of Express Contracts

While express contracts offer clarity, they are not without drawbacks. Potential limitations include:

  • Rigidity – once terms are agreed upon, modifying them may require formal amendments.
  • Cost and time to draft – written contracts may require legal review and negotiation.
  • Risk of overlooked terms – if a contract fails to address certain scenarios, disputes may still arise.

Despite these challenges, businesses often prefer express contracts because the advantages of certainty and enforceability outweigh the downsides.

Benefits and Common Uses of Express Contracts

Express contracts are widely used in business and personal transactions because they reduce ambiguity. By explicitly stating the terms, parties understand their obligations and rights without relying on assumptions. Common uses include:

  • Employment agreements – defining roles, salaries, and termination procedures.
  • Real estate contracts – outlining purchase price, contingencies, and closing dates.
  • Service contracts – for consultants, freelancers, or contractors with specific deliverables and timelines.
  • Sales of goods – specifying product details, warranties, and payment schedules.

One of the major benefits of an express contract is the ease of enforcement. Courts can review the written or verbal terms directly to determine whether a breach occurred. This clarity helps avoid disputes and provides security for all parties involved.

More on Implied Contracts

While an implied contract can be entered into without the intent of one of the parties to complete a particular task or even enter into a contract, the law basically does not care about the party’s intent if the actions implied the existence of a contract. Thus, the obligation to perform the job still exists. This is also known as implied by law.

An example of a contract that is implied by law may be if you loan some clothes to your friend Jill. Accidentally, however, some of the clothes you lent her actually belong to your other friend Anne. It is now going to be Jill’s responsibility to return Anne’s clothes to her.

Another example of a contract that is implied by law may be if you are often hired to mow the laws of many of your neighbors. Let’s assume that you are in high demand, and you sometimes lose track of whose lawn you are supposed to mow when, or even which specific people have asked you to come and cut their grass. As such, you then mow the lawn for Mr. Jones, by mistake, and when you go to obtain your payment, he refuses, since he never actually asked you to mow his lawn. A court could decide that even though you were erroneous in thinking that Mr. Jones had hired you, he still should not be able to receive those services for free; a court may insist that Mr. Jones still pay you. (While probably also making you see the importance of better record-keeping!)

Within the scope of implied contracts, there also exist those that are implied by fact. These are just as legally binding as an express contract, and they come about as the result of actions and circumstances; declared intentions.

An example of a contract implied by fact could be you asking for the fashion advice of a friend who is a personal stylist. You know what this friend does for a living and that she gets paid for her services. Should she then send you a bill after providing her professional advice, a court may decide that you need to pay that invoice, as you were seeking the advice of a professional personal stylist, even though a concrete contract had not been put in place.

Implied contracts are sometimes also referred to as quasi-contracts. Even though they actually lack the mutual consent that typically required to consider a contract valid, the courts will often uphold them as a means of ensuring that one party is not being treated unjustly or taken advantage of by another party.

Challenges in Enforcing Implied Contracts

Unlike an express contract, an implied agreement can be harder to prove in court. The main challenges include:

  • Proving intent – courts must evaluate actions, conduct, or circumstances to establish that both parties intended an agreement.
  • Lack of documentation – without written terms, it becomes one party’s word against another’s.
  • Greater uncertainty – disputes over scope, payment, or performance are more common.

Because of these difficulties, businesses and individuals often prefer express contracts when clarity and enforceability are essential.

Types of Implied Contracts

Implied contracts fall into two primary categories:

  1. Implied-in-fact contracts – arise from the conduct of the parties. For example, ordering a meal at a restaurant implies you will pay for it, even if no words are exchanged.
  2. Implied-in-law (quasi-contracts) – imposed by courts to prevent one party from being unjustly enriched at another’s expense. For instance, if a doctor renders emergency medical care to an unconscious patient, the law may require payment despite no agreement being made.

Both forms are legally binding, but quasi-contracts are especially important in ensuring fairness when consent was not possible.

Frequently Asked Questions

  1. What is the main difference between an express contract and an implied contract?
    An express contract clearly states terms, either in writing or verbally, while an implied contract is formed through conduct or circumstances.
  2. Are express contracts always written?
    No. An express contract can be verbal or written, but written agreements are easier to enforce and prove in court.
  3. Can implied contracts be legally binding?
    Yes. Both implied-in-fact and implied-in-law (quasi-contracts) are enforceable, though they can be harder to prove.
  4. Why are express contracts preferred in business transactions?
    Express contracts provide clarity, minimize disputes, and offer strong evidence in case of legal enforcement.
  5. When should I avoid relying solely on an implied contract?
    You should avoid relying on implied agreements when large sums of money, long-term obligations, or significant risks are involved. In these cases, an express contract is safer.

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