Everything You Need to Know About Express Contracts

Navigating the business landscape is often overwhelming. The use of contracts helps in managing relations as well as mitigating risks. Express contracts are an excellent gateway to the world of secure and safe agreements. Let’s get to know more! 

What is an Express Contract?

In layman’s terms, an express contract has clearly stated conditions. An express contract demands that the terms and conditions of the agreement are stated verbally or in writing. Unlike implied contracts, where these terms are inferred through actions, here, they have to be explicitly stated, failure of which will lead to nullification.

Express contracts provide trustability and effectiveness and eliminate the need to be ambiguous or uncertain regarding contract clauses.This makes the whole process streamlined and worry-free.

What Defines an Express Contract?

By now, you understand the basis of an express contract. However, for it to be legally binding, there are certain parameters that it ticks. Let’s discuss them below:

1.   Offer

As is the case with any contract, an offer has to be made for any express contract to exist. It is important to note that in an express contract, the offer has to have some set conditions, terms and contract clauses that the other party will agree upon.

2.   Acceptance

Following a particular offer, the opposite party accepts the said terms, agreement, and clauses. This is known as contract acceptance. Express contract only works if this acceptance is mutual.

3.   Value

An express contract must be valuable to both parties. This essentially means that both the parties must gain something from the agreement.

Let’s better understand this with an example; Person X wants to sell their bike. X contacts Y with an offer of 40k for the bike. After some negotiations, X decides to sell the bike for 35k to Y. Y accepts the offer and confirms that they will purchase the bike from X. This is an example of express contracts. X’s purpose of selling the bike and Y’s purpose of purchasing a bike are both fulfilled by the contract.

4.   Capacity

Yet another important aspect of an express contract is the capacity to enter into an agreement. Both the parties have to be capable to enter into a contract.

Drawing from the previous example; Y cannot enter into an express contract with X, unless they have the money.

5.   Clarity

Perhaps the most important feature of an express contract is its clarity. Express contracts offer clear information about the responsibilities, rights and duties of all parties. Therefore, the contract is seamless, free from personal assumption or interpretation.

Express Contract Myths: Debunked

Express contracts are not free from misconceptions and myths. Let’s debunk common ones in this section.

Myth 1: Express Contracts have to be written down

Wrong! Verbal agreement is valid in express contracts. However, in day to day practice, a mix of both verbal and written agreement is followed. And one should document any contract thoroughly to avoid future disputes.

Myth 2: Express Contracts are the only type of contract

Express contracts are a tool in a shed of tools. So, express contracts are not the only types of contracts.

Real-world Scenarios

Now that we have a basic understanding of what express contracts are, let’s look at some real life examples.

1. The real estate industry often utilises express contracts. In this industry, the terms and conditions need to be clearly outlined and agreed upon. So, if a tenant is moving into a room, the landlord has to provide an express contract with the appropriate clauses.
2. Employment contracts are also express contracts essentially as both parties mutually agree to the terms and conditions of the employment. Breach of the said contract can lead to potential lawsuits.

To sum it up

In conclusion, the benefits of express contracts are endless! If you’re all about ensuring clear communication and robust agreement then an express contract is the right choice.