Definition
An Express Contract is a type of agreement in which the terms are stated explicitly, either orally or in writing. Within the realm of real estate, express contracts are crucial as they provide clear stipulations regarding the property’s sale and purchase, rental agreements, and other property-related transactions. The elements required for a valid express contract include offer, acceptance, consideration, mutual consent, and legal purpose.
Key Features:
- Written or Oral: Can be made explicitly in writing or verbally.
- Comprehensive Terms: Specifies terms and conditions in detail.
- Mutual Assent: Both parties agree to the terms.
- Legally Binding: Once accepted, it is enforceable by law.
Examples
- Agreement of Sale: A documented agreement between a buyer and seller detailing the property, price, payment terms, and other conditions.
- Lease Agreements: A written contract between a landlord and tenant specifying the lease term, rent amount, property rules, and responsibilities.
- Employment Contract for Property Managers: A written contract detailing the duties, salary, and duration of employment for a property manager.
FAQs
What makes an express contract enforceable?
An express contract becomes enforceable when it includes an offer, acceptance, consideration (something of value exchanged between the parties), mutual consent, and a legal purpose.
Can an express contract be verbal?
Yes, an express contract can be verbal, but in real estate transactions, written contracts are preferred for clarity and legal enforcement.
How does an express contract differ from an implied contract?
An express contract has stated terms and explicit agreement. An implied contract is formed based on the actions and circumstances of the parties involved.
Do express contracts need to be notarized?
Not necessarily. However, some real estate transactions may require notarization as per state laws.
How can disputes in express contracts be resolved?
Disputes may be resolved through mediation, arbitration, or litigation, depending on the terms of the contract and the jurisdiction.
Related Terms
- Implied Contract: A contract formed through actions or circumstances rather than written or spoken words.
- Bilateral Contract: A reciprocal arrangement where each party promises to perform an act in exchange for the other’s promise.
- Unilateral Contract: A contract where one party promises to pay for a specified act by the other party.
- Contingent Contract: A contract that depends on a condition or event that may not occur.
Online Resources
References
- Restatement (Second) of Contracts
- Black’s Law Dictionary
- American Law Institute - Principles of the Law of Contracts
Suggested Books for Further Studies
- “Fundamentals of Contract Law” by J.D. Calamari and J.M. Perillo
- “Contract Law in Focus” by Michael B. Kelly and Karen A. Reimann
- “The Law of Contracts and the Uniform Commercial Code” by Pamela Tepper
Express Contract Fundamentals Quiz
### Do the terms of an express contract need to be in writing to be enforceable?
- [ ] Yes, it needs to be in writing to be enforceable.
- [x] No, it can be either written or verbal.
- [ ] Only digital contracts are considered enforceable.
- [ ] None of the above.
> **Explanation:** An express contract can be enforceable whether it is written or verbal as long as it clearly defines the terms agreed upon by both parties.
### What are the key elements necessary for a valid express contract?
- [x] Offer, acceptance, consideration, mutual consent, and legal purpose.
- [ ] Only signature from both parties and a witness.
- [ ] Offer, acceptance, signature, and state notarization.
- [ ] Offer, acceptance, and guarantee.
> **Explanation:** For a contract to be valid and enforceable, it must have an offer, acceptance, consideration (an exchange of value), mutual consent (both parties agree), and a legal purpose.
### Can a handshake agreement be considered an express contract?
- [x] Yes, if the terms are stated verbally and agreed upon.
- [ ] No, it has to be documented.
- [ ] Only if it's notarized.
- [ ] Only in certain states.
> **Explanation:** A handshake agreement can constitute an express contract if the terms are clearly stated and agreed upon by the parties involved, though such agreements are harder to prove than written contracts.
### What distinguishes an express contract from an implied contract?
- [x] Terms are explicitly stated in an express contract.
- [ ] An express contract relies on circumstantial evidence.
- [ ] An express contract is always notarized.
- [ ] Only implied contracts are legally enforceable.
> **Explanation:** An express contract has explicitly stated terms, either written or oral, whereas an implied contract is formed based on actions and circumstantial evidence.
### What should parties do if there is a dispute over an express contract?
- [ ] Attempt to resolve through direct negotiation or mediation.
- [ ] Go directly to court without attempting resolution.
- [x] Try mediation, then possibly arbitration, or litigation if necessary.
- [ ] Ignore it if the dispute is trivial.
> **Explanation:** Disputes in express contracts are often resolved initially through negotiation or mediation. If these methods are unsuccessful, arbitration or litigation may be required.
### What is a frequent reason for specifying terms in a written express contract?
- [ ] To make it more difficult to read.
- [x] To provide clear evidence and reduce ambiguities.
- [ ] To comply with international law.
- [ ] To avoid future bargaining.
> **Explanation:** Specifying terms in a written express contract provides clear evidence of the agreement, which can help reduce ambiguities and disputes in the future.
### Is an express contract still valid if one party later disagrees with the terms?
- [x] Yes, unless there was fraud, duress, or lack of legal consent.
- [ ] No, disagreement nullifies it.
- [ ] Only if said party provides a valid reason.
- [ ] Not without renegotiation.
> **Explanation:** An express contract remains valid even if one party later disagrees, provided there was no fraud, duress, or lack of consent when the agreement was made.
### Are terms and conditions always necessary for an express contract?
- [x] Yes, they help to avoid misunderstandings.
- [ ] No, terms make the contract less flexible.
- [ ] Only if one party requests it.
- [ ] Terms and conditions invalidate the contract.
> **Explanation:** Clear terms and conditions are essential to avoid misunderstandings and ensure that both parties understand their obligations under the contract.
### What is the primary benefit of an express contract in real estate transactions?
- [ ] Reduces legal fees.
- [ ] Speeds up closing processes.
- [x] Ensures clarity and legal enforceability of terms.
- [ ] Lowers property taxes.
> **Explanation:** In real estate, clear, express contracts ensure that terms are legally enforceable and reduce the risk of disputes.
### Can legal advice help in drafting an express contract?
- [x] Yes, legal advice can ensure terms are clear and enforceable.
- [ ] No, it is not needed for standard agreements.
- [ ] Only if the contract exceeds one year.
- [ ] Only for commercial properties.
> **Explanation:** Legal advice is beneficial in drafting an express contract to ensure clarity, compliance with the law, and enforceability.
