THE LAW OF CONTRACT

Group assignment question

4. What is an express contract and an implied contract?
The contract can be defined as any agreement which is legally enforceable. So, the
fundamental elements of a contract are agreement and enforceability as per law, wherein the
agreement is a result of offer and acceptance. Based on the formation, contracts are grouped
as, express contract and implied contract.
An Express contract is a legally binding agreement with clearly stated terms, made either
verbally or in writing between two parties, both of whom understand and intend to enter in,
thus removing ambiguity and uncertainty. Express contracts connote the type of contract
whose terms are expressly declared. In short, when the offer and acceptance of the agreement
are communicated verbally, then the contract is said to be express. Whether oral or written,
the contract must manifest a mutual intent to be bound expressed in a manner capable of
being understood, and include a definite offer, unconditional acceptance, and consideration.
Legally, the elements of an express contract are:
(1) an offer by one party and an acceptance by the other,
(2) consideration, in particular something of value contributed by each party and
(3) a mutuality of intent— specifically, a meeting of the minds regarding the provisions of
the agreement.
Irrespective of the mode of expression, the contract must exhibit the mutual intent of the
parties concerned to be bound. Further, the expression must be spelled out and interpreted. It
encompasses a certain proposal, unconditional acceptance and adequate consideration.
Verbal example: One person expressly offers to sell a widget to another person. The other
person accepts the offer by saying the she will buy it. The parties have an expressed contract
because they have stated an offer, stated an acceptance, and identified consideration. These
expressions can be verbal, as in this situation, or written
Written example: John writes a letter to Tom, offering to sell his car to him for $6 000. Tom,
by a written letter, gives his acceptance of the proposal. Such a contract is known as an
express contract.
Implied Contract means a contract which is inferred by the activities and conduct of the
parties concerned. In other words, a contract in which the elements, i.e. offer and acceptance
is made, without the use of words, then this type of contract is known as implied contract.
Such a contract come into being from the assumed intention of the parties. It can be of two
types:
1. Implied by law: A contract implied by law is one in which the parties have no
intention to enter into the contract. However, the law imposes an obligation to perform the
contract, irrespective of the consent of the parties Implied Contract means a contract which is
inferred by the activities and conduct of the parties concerned. For example: Roma, gives
books to Alen by mistake, which belongs to Sera. Now, it is Alen’s obligation to return the
books to Roma; even there is no intention to get into the contract.
2. Implied by fact: In a contract implied by the fact, the obligation is created between the
parties, on the basis of the circumstances and actions. For example: Purchasing groceries
from mall or retail store. An implied-in-fact contract arises from the conduct of the parties,
rather than from words. That is, the parties interact in a manner that constitutes a legally
enforceable contract. This means that all of the elements of an enforceable contract can be
inferred from the actions of the parties. The legal elements of an implied-in-fact contract are
the same as an express contract: offer and acceptance, consideration and mutuality of intent.
However, some of the terms must be deduced from the parties' actions.

BASIS FOR
EXPRESS CONTRACT IMPLIED CONTRACT
COMPARISON

Meaning Express contract is one in Implied contract refers to a

which the proposal and
acceptance, that results in an
agreement, enforceable by
law, is expressed verbally.
contract wherein the proposal
and acceptance, leading to the
contract, is expressed non-
verbally, i.e. through other
means.

Contract creation By words By conduct or behaviour

Example Leasing Agreement Sale by fall of hammer in an

auction sale.

The main difference between the two types of contract, primarily differs on the basis of the
mode of communicating assent and evidence required. In an express contract, the terms and
conditions are explicitly manifested. It differs from an implied contract, in the sense that, a
contract which is supposed to exist, based on the conduct of the parties involved.