Express Contracts vs. Implied Contracts in Business Law
Want to hear a bold but accurate truth? A lot of business owners think they don’t need a contract until something goes wrong. And by the time they realize they did have a contract (just not a written one) the damage is already done, the relationship is toast, and a lawsuit is breathing down their neck.
Contracts come in more than one flavor. There are express contracts (the kind you put on paper), and then there are implied contracts (the kind that sneak up on you while you’re busy doing “business as usual”). While both are contracts, they aren’t the same.
At In Motion Law, we help business owners in San Diego draft, review, negotiate, and their business agreements. And we’re here today to break down the difference between express and implied contracts—and why understanding that difference can save your business from losing cash, clients, and credibility.
What Is an Express Contract?
You know this one. It’s the classic. The signed deal. The written terms. On paper. The email thread with clear agreement. An express contract is what happens when both parties explicitly agree to the terms of a deal—verbally or in writing—and everyone knows what’s expected.
- Here’s an example: You hire a freelance designer to build your website. You both sign a contract that says, “You pay $5,000, I deliver a website by July 30.” That’s express.
Simple, right? Clear expectations, legal backing, and no ambiguity. If someone doesn’t deliver, you’ve got a piece of paper (or a digital trail) that courts can enforce.
So What’s an Implied Contract Then?
Here’s where it gets murky. An implied contract is formed by conduct rather than words. Nobody signed anything, nobody spelled out the deal, but everyone acted like there was an agreement. And under the law? That behavior might be enough to count.
There are two main types:
- Implied-in-fact contracts: Both parties act in a way that clearly implies they had an agreement. Example: You run a marketing agency. A client keeps sending you projects. You keep completing them and invoicing them. No formal contract, but this has gone on for eight months and they’ve always paid. Suddenly, they stop paying and ghost you. Yes, you could argue there’s an implied-in-fact contract, but proving it will still be a lot messier than pointing to a signed piece of paper that outlines the terms.
- Implied-in-law contracts: The court steps in and creates a contract to prevent one party from unfairly taking advantage of another party. Example: You accidentally get delivered 50 premium office chairs you didn’t order, but you accept and use them without complaint. The court may say you owe the supplier something because it would be unfair for you to get the benefit without paying.
Contracts—both express and implied—are enforceable in court. But here’s the kicker: express contracts are way easier to enforce. With implied contracts, everything becomes a question of interpretation, behavior, and intent. And you can bet your bottom dollar the other side will have a different version of “what was understood.”
Need Help with an Express or Implied Contract? Contact In Motion Law
At In Motion Law, we’ve seen businesses tank because they relied on “understandings” instead of agreements. And we’ve also helped clients recover because we knew how to argue that an implied contract did exist, and how to make it stick.
Whether you’re just starting a business, scaling one, or untangling a mess from a “trust-based” partnership that went sideways, we can help.
Our lawyer can review your contracts, draft the ones you didn’t realize you needed, and, if necessary, build a legal strategy when someone else decides to play dumb about your agreement.
Schedule a consultation with In Motion Law and let’s talk about how we can help in your specific situation. Call at 619-693-8336 today.
