Business Law Note 3.2

Business Law Note 3.
Please note that this portion of the note is written from the US, UK and general Common
Law perspective. We will discuss the differences between common and civil law approaches
in class.
Expressed vs. Implied Contracts: Differences & Examples
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.
In this case, the judge would most likely require you to make restitution, or pay the other
party fairly for the services provided to you, even though nothing was written or signed by
either of you.
Lesson Summary
In a nutshell, there are two types of contracts:
 Expressed
 Implied
An expressed contract requires that the elements are specifically stated, including offer,
acceptance and consideration. There are other elements like mutual assent, capacity and
legally accepted terms. Examples include the sale of real estate, employment contracts and
even a contract to perform a service.
Some contracts are not written. They are implied, and this type of contract happens 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.
An implied contract can come in two forms:
 Implied in fact
 Implied in law
An implied in fact contract results from a common understanding based on the conduct of
the parties and serves as a contract, like paying for your food at a restaurant.
There are times when a contract forms after the fact as a means of restitution, or repayment
for services, when one party becomes unjustly enriched by the performance of another.
This means one person benefits from someone else's actions but does not compensate them
for it.
Think about a doctor saving the life of an unconscious person. The court will weigh
whether the person receiving the life-saving medical attention benefited from the services
and will probably require that the benefited party pay for the services.

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Business Law Note 3.

Expressed vs. Implied Contracts: Differences & Examples

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