What Is the Difference between an Express Contract and an Implied in Fact Contract

Contracts are the foundation of any business transaction. They establish the rights and obligations of each party and provide a framework for resolving disputes. However, not all contracts are created equal. Some contracts are express, while others are implied in fact. Understanding the difference between these two types of contracts is crucial to ensuring that your business operations run smoothly.

Express Contracts

An express contract is a contract that is explicitly stated in writing or confirmed verbally. It is a clear and specific agreement that outlines the terms and conditions of the agreement. Express contracts are the most common type of contract used in business transactions. They are typically used for significant transactions, such as the purchase of property or the hiring of employees.

Express contracts are legally binding, and both parties are bound by the terms of the agreement. Once the contract has been signed, it cannot be changed without the consent of both parties. If one party breaches the contract, the other party has the right to enforce the terms of the agreement.

Implied In Fact Contracts

An implied in fact contract is not explicitly stated in writing or confirmed verbally. Instead, it is an agreement that is implied by the conduct of the parties involved in the transaction. Implied in fact contracts are often used in situations where there is no written agreement or where the terms of the agreement are not clear.

For example, if you go to a restaurant and order a meal, you are entering into an implied in fact contract with the restaurant. You are agreeing to pay for the meal, and the restaurant is agreeing to provide you with food and service. Although there is no written agreement, the conduct of both parties implies that there is a contract in place.

Implied in fact contracts are also legally binding, and both parties are bound by the terms of the agreement. However, because they are not explicitly stated, they can be more challenging to enforce if one party breaches the contract.

Key Differences Between Express Contracts and Implied In Fact Contracts

The primary difference between express contracts and implied in fact contracts is that express contracts are explicitly stated, while implied in fact contracts are implied by the conduct of the parties. Additionally, express contracts are typically used for significant transactions, while implied in fact contracts are used for smaller transactions or situations where there is no clear agreement.

Another key difference is that express contracts are easier to enforce than implied in fact contracts. With an express contract, the terms of the agreement are clear and specific, making it easier for both parties to understand their rights and obligations. If one party breaches the contract, the other party can enforce the terms of the agreement.

Implied in fact contracts, on the other hand, are more challenging to enforce because the terms of the agreement are not explicitly stated. If one party breaches the contract, it may be challenging to prove the existence of the agreement or the terms of the agreement.

Conclusion

In conclusion, contracts are essential to any business transaction. Understanding the difference between express contracts and implied in fact contracts is crucial to ensuring that your business operations run smoothly. Express contracts are explicit and specific agreements that are legally binding, while implied in fact contracts are implied by the conduct of the parties involved in the transaction. Both types of contracts are legally binding, but express contracts are easier to enforce because the terms of the agreement are clear and specific.