Expressed vs. Implied Contracts: Differences & Examples

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  • 0:08 Expressed Contracts
  • 1:16 Implied Contracts
  • 3:11 Lesson Summary
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Lesson Transcript
Instructor: Kat Kadian-Baumeyer

Kat has a Master of Science in Organizational Leadership and Management and teaches Business courses.

There are two types of contracts: an expressed contract, which states the promises in clear language, and an implied contract, which is where behaviors or actions lead parties to believe an agreement exists.

Expressed Contracts

Miguel wants to purchase his first home. He found the perfect place in Pasadena. The contract for purchase was signed, and he closed on the home within a month.

The contract Miguel entered into is an expressed contract because the elements are specifically stated, including offer, acceptance and consideration. To break it down, a contract contains six elements:

  • An offer
  • Acceptance of the offer
  • Consideration
  • Mutual assent
  • Capacity
  • Legally accepted terms

This is pretty straightforward. Miguel searched for a home, found the perfect place and accepted the seller's offer to purchase.

Once Miguel did that, he had to come up with the money to purchase the home. Both parties agreed to the terms, and are of age and mental capacity to enter into the contract, and there was nothing illegal about the sale. Miguel is now a happy homeowner.

But, not every contract works this way. In fact, some contracts are not written or expressed. They just happen because of a circumstance. This sounds counter-intuitive, I know.

Implied Contracts

An implied contract works differently. This type of contract evolves when no written contract is present, but circumstances may cause one person to become unjustly enriched as a result of their actions or an understanding exists.

There are two types of implied contracts:

  • Implied in fact
  • Implied in law

An example of each will help to explain the conditions necessary for each type of contract.

When you arrive at the hair salon for your usual cut, it is expected that you will pay for the services rendered. That is an implied in fact contract. The common understanding based on the conduct of the parties serves as a contract to pay for your new 'do!

Now, implied in law contracts work a bit differently. In fact, they are really not contracts at all. That is why the law gives them a clever name like 'quasi-contracts.' This is because the court determines whether this type of contract existed after performance or non-performance as a means to determine whether one party can collect restitution for a service they performed.

An example will help. Suppose you choked on a fish bone at your favorite seafood restaurant. Lucky for you, there was a doctor in the house. After the doctor performed the Heimlich maneuver to dislodge the obstruction, he handed you a bill for his services.

You may refuse to pay because you did not solicit his services, but you won't get very far. The law will look at whether you were unjustly enriched by accepting his services to clear your throat. And, this occurs when one party receives something of value from another unfairly, like receiving free medical treatment to save your life.

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