What Is a Express Contract Example

When it comes to business deals and legal agreements, there are two types of contracts that are commonly used: express contracts and implied contracts. An express contract is a legally binding agreement that is explicitly stated in writing or verbally between two parties. In this article, we will explore what an express contract is and provide an example.

What is an Express Contract?

An express contract, also known as an explicit contract, is a contract where all the terms and conditions are explicitly stated by both parties. This contract can be either written or verbal, and the terms must be clearly defined and easily understood by both parties. Usually, express contracts are used in business transactions, service agreements, employment contracts, and sales agreements.

Express contracts are governed by the law, with the terms explicitly stated, and there is an obligation for both parties to fulfill the agreement. In case of a breach of the express contract, the non-breaching party has the legal right to file a lawsuit against the other party.

Example of Express Contract

Let`s take an example to understand it better. Suppose, Company A agrees to sell 1000 units of a product to Company B for $1000, and both parties agree to the following terms:

– The payment is to be made within 30 days of delivery.

– The products will be delivered by Company A within two weeks of the agreement.

– Company B can only return the products if they are defective or damaged.

In this example, all the terms are explicitly stated, and both parties have agreed to them. If Company A fails to deliver the products within the agreed time frame, Company B has the legal right to take legal action against Company A.

Conclusion

In conclusion, express contracts are legally binding agreements that are explicitly stated and understood by both parties. They help in avoiding any miscommunication or misunderstandings during the negotiation of terms and conditions. When entering into any business deal, it`s important to have an express contract that outlines all the terms and conditions to protect both parties from any potential disputes in the future.