Contracts are a crucial part of any business transaction. They help establish expectations and outline the responsibilities and obligations of all parties involved. However, not all contracts are created equal. In fact, there are two main types of contracts – express and implied contracts.
Express contracts are those that are explicitly stated, either orally or in writing. They are the most common type of contract and are commonly used in business transactions. Express contracts may be in the form of a written agreement, a purchase order, or a sales contract. These contracts can be as simple or as complex as needed, depending on the nature of the transaction.
In an express contract, the parties involved usually negotiate and agree on specific terms and conditions, such as price, delivery dates, payment terms, and other important details. Once the agreement is reached, it is documented in writing, signed by all parties involved, and becomes legally binding.
Implied contracts, on the other hand, are not explicitly stated. Instead, they are based on the actions, behavior, or circumstances of the parties involved. Implied contracts are often referred to as “unspoken agreements” because the terms and conditions are not written down.
An implied contract can arise in situations where one party provides goods or services to another party, and the second party accepts those goods or services. In this case, an implied contract is created, even though there may not be any written or verbal agreement in place.
Implied contracts can also arise from the conduct of the parties involved. For example, if a homeowner hires a contractor to paint their house and the contractor begins work without first discussing payment terms, an implied contract is created that the contractor will be paid for their services.
In conclusion, while express contracts are the most common type of contract, implied contracts can also be legally binding. It is important to understand the different types of contracts and their implications, as they can have a significant impact on any business transaction. As such, it is crucial to review contracts carefully before signing them, and seek legal advice if necessary.