Definition
An express contract is a binding agreement with terms explicitly stated either orally or in writing. Both parties clearly communicate their expectations, obligations, and rights, ensuring mutual understanding and agreement on all essential elements of the contract. Unlike implied contracts, express contracts leave little to no room for misunderstandings about the terms.
Examples
- Employment Contract: An employee signs a written agreement detailing job responsibilities, compensation, duration, vacations, and other employment conditions.
- Sales Agreement: A customer and a seller agree verbally on the price and delivery date of goods or services, clearly expressing the terms of sale.
- Lease Agreement: A landlord and tenant sign a lease outlining the terms of rental, including monthly payments, length of lease, and property regulations.
Frequently Asked Questions (FAQs)
What is the difference between an express contract and an implied contract?
- Express Contract: Terms are clearly articulated either in writing or verbally.
- Implied Contract: Terms are inferred from actions, behaviors, or circumstances without explicit statements.
When is an express contract necessary?
An express contract is necessary when parties need a clear understanding of each other’s obligations and rights, typically in business transactions, employment agreements, and real estate deals.
Can an oral express contract be legally enforceable?
Yes, oral express contracts can be legally enforceable, although proving the terms can be more challenging compared to written contracts.
What happens if one party breaches an express contract?
If one party breaches an express contract, the aggrieved party can seek legal remedies, such as damages, specific performance, or contract termination.
Are written agreements always better than oral agreements?
Written agreements are often better as they provide clear, documented evidence of the terms agreed upon, reducing the potential for disputes.
Related Terms
- Implied Contract: A contract formed in whole or in part by the conduct or situation of the parties, rather than explicit written or spoken terms.
- Breach of Contract: Failure to perform any term of a contract, written or oral, without a legitimate legal excuse.
- Consideration: Something of value, such as money, an act, or a service, exchanged between parties to form a binding contract.
- Mutual Assent: Agreement by all parties to the terms of the contract, often evidenced by an offer and acceptance.
Online References
- Investopedia on Express Contract
- Legal Information Institute on Contract
- Nolo’s Encyclopedia on Contracts
Suggested Books for Further Studies
- Contract Law: Concepts and Cases by Tracey E. George and Russell Korobkin
- Principles of Contract Law by Steven J. Burton
- The Law of Contracts and the Uniform Commercial Code by Pamela Tepper
- Contract Law: An Introduction to the English Law of Contract for the Civil Lawyer by John Cartwright
Fundamentals of Express Contract: Business Law Basics Quiz
### What is an express contract?
- [ ] A contract based on the implied actions of the parties.
- [ ] A contract outlined by the courts.
- [x] A contract with terms explicitly stated verbally or in writing.
- [ ] A contract that is not legally binding.
> **Explanation:** An express contract is one in which the terms are clearly stated either orally or in writing.
### Which of these is NOT a feature of an express contract?
- [ ] Clearly stated terms.
- [ ] Mutual understanding.
- [ ] Legal enforceability.
- [x] Implied terms by behavior.
> **Explanation:** Express contracts have clearly stated terms either in writing or verbally and do not rely on implied terms by behavior.
### Can an express contract be oral?
- [x] Yes.
- [ ] No.
- [ ] Only if witnessed.
- [ ] Only if notarized.
> **Explanation:** An express contract can indeed be oral, provided that the terms are clearly communicated and agreed upon by both parties.
### Which is easier to prove in court, a written express contract or an oral express contract?
- [ ] Oral express contract.
- [x] Written express contract.
- [ ] Neither, both are equally easy.
- [ ] Implied contract.
> **Explanation:** A written express contract is easier to prove in court as it provides documented evidence of the agreed terms.
### What does mutual assent refer to in an express contract?
- [ ] One party's agreement to the terms.
- [x] Both parties' agreement to the terms.
- [ ] Court's validation of the contract.
- [ ] The financial consideration.
> **Explanation:** Mutual assent refers to both parties agreeing to the terms of the contract.
### What is necessary for an express contract to be legally binding?
- [ ] Only one party needs to agree.
- [x] Clear terms and mutual agreement.
- [ ] A public announcement of the agreement.
- [ ] Party's agreement on material things only.
> **Explanation:** For an express contract to be legally binding, it needs clear terms and mutual agreement from both parties.
### If an express contract is breached, what can the aggrieved party seek?
- [x] Legal remedies like damages, specific performance, or contract termination.
- [ ] Only moral support.
- [ ] Arbitration only.
- [ ] Amendments to the contract.
> **Explanation:** In case of a breach of express contract, the aggrieved party can seek legal remedies such as damages, specific performance, or contract termination.
### Is an oral agreement stronger than a written agreement?
- [ ] Yes, always.
- [ ] Only if sworn before a notary.
- [x] No, oral agreements are often harder to prove.
- [ ] It depends on the jurisdiction.
> **Explanation:** Oral agreements are typically harder to prove than written agreements, making written agreements generally stronger.
### What type of express contract needs to be in writing according to the Statute of Frauds?
- [ ] Any contract under $100.
- [x] Contracts for goods over a certain amount or that cannot be performed within a year.
- [ ] Only real estate contracts.
- [ ] Employment contracts only.
> **Explanation:** According to the Statute of Frauds, certain contracts, such as those involving goods over a certain amount or those that cannot be performed within a year, must be in writing.
### How do express and implied contracts differ?
- [ ] Express contracts are for businesses and implied are for personal use.
- [x] Express contracts have explicitly stated terms, while implied contracts are inferred from actions or circumstances.
- [ ] Implied contracts are more enforceable.
- [ ] Express contracts are only verbal.
> **Explanation:** Express contracts have explicitly stated terms, either written or verbal, while implied contracts are inferred from the actions or circumstances of the parties.
Thank you for exploring the intricacies of express contracts and engaging with our quiz. Continue mastering concepts for your business law knowledge!
