Guide to Legal Contracts = Английский язык для юристов договорное право. Учебное пособие по английскому языку для студентов юридических вузов

UNIT 4

T Y P E S O F C O N T R A C T S

O N T H E B A S I S O F F O R M A T I O N

Part I

EXPRESS CONTRACTS AND IMPLIED CONTRACTS

Definition of Express Contract

Anexpresscontractisacontractwithclearlystatedterms.Anexpress contract is a contract whose terms the parties have explicitly set out. This is also termed as special contract. In an express contract, all the elements would be specifically stated. In an express contract, the agreement of the parties is expressed in words, either in oral or written form. Express contracts are probably the ones we most commonly think of.

Examples of express contract:

  A landlord presents “A” with a preprinted lease on the apartment that “A” wants and if he agrees to the terms and signs it, then it is an express, written contract;

  “I offer to sell you my 2010 Mercedes and after some negotiations, you agree to purchase it on the terms we have worked out, a bargain for less than $10,000.” This is an express oral contract;  If you hire a website designer to design your business’s website. The terms and conditions are spelled out, including details such as deadlines and payment dates, both parties agree and sign the con-

tract, and the work on building your new website begins;

22

  X says to Y, will you buy a car for Rs. 100000? Y says to X, I am ready to buy your car for Rs. 100000. It is an express contract made orally;

  XwritesalettertoY,IoffertosellmycarforRs.100000toyou. Y send a letter to Y, I am ready to buy your car for Rs. 100000. It is an express contract made in writing;

  “A” writes to “B”: “I want to sell my house for $ 50 000”. “B” accepts the offer and writes a letter to that effect.

Definition of Implied Contract

Implied Contract means a contract which is inferred by the activities and conduct of the parties concerned. In other words, a contract in which the elements, i.e. offer and acceptance is made, without the use of words, then this type of contract is known as implied contract. Such a contract come into being from the assumed intention of the parties. It can be of two types: Implied by law and

Implied by fact.

Impliedbylaw:Acontract implied by law is one in which the parties have no intention to enter into the contract. However, the law imposes an obligation to perform the contract, irrespective of the consent of the parties. Implied by law contracts are not technically contracts at all. These are situations wherein a court can decide if a contract did, in fact, exist because of the behavior (or lack of behavior) of those involved.The purpose of involving a court is to determine whether the parties can collect restitution for services rendered.

Examples of Implied by law contract

  Roma, gives books to Alen by mistake, which belongs to Sera. Now, it is Alen’s obligation to return the books to Roma; even there is no intention to get into the contract;

  Apassenger on an airplane begins to choke mid-flight. Luckily, there is a doctor on board and he performs the Heimlich maneuver, saving his fellow passenger.The doctor then hands the passenger a bill for services rendered. The passenger refuses to pay the bill, his reason being because he did not ask the doctor for his help;

23

  If you loan some clothes to your friend Jill.Accidentally, however, some of the clothes you lent her actually belong to your other friend Anne. It is now going to be Jill’s responsibility to return Anne’s clothes to her;

  Another example of a contract that is implied by law may be if you are often hired to mow the laws of many of your neighbors. Let’s assume that you are in high demand, and you sometimes lose track of whose lawn you are supposed to mow when, or even which specific people have asked you to come and cut their grass. As such, you then mow the lawn for Mr. Jones, by mistake, and when you go to obtain your payment, he refuses, since he never actually asked you to mow his lawn. A court could decide that even though you were erroneous in thinking that Mr. Jones had hired you, he still should not be able to receive those services for free; a court may insist that Mr. Jones still pay you. (While probably also making you see the importance of better record-keeping!)

Implied by fact: In a contract implied by the fact, the obligation is created between the parties, on the basis of the circumstances and actions. An implied by fact contract is a contract that exists when a person arrives at an establishment and expects to receive a service.

Examples of Implied by fact contract:

  Purchasing groceries from mall or retail store;

  When a person goes to the local deli, the deli expects that the customer will order and then pay for his sandwich. The customer also expects that, when he orders a sandwich and offers to pay for it, he will receive exactly what he has ordered.This common understanding between the parties based on their conduct in this situation serves as an implied by fact contract;

  An example of a contract implied by fact could be you asking for the fashion advice of a friend who is a personal stylist. You know what this friend does for a living and that she gets paid for her services. Should she then send you a bill after providing her professional advice, a court may decide that you need to pay that invoice, as you were seeking the advice of a professional personal stylist, even though a concrete contract had not been put in place.

24

Implied contracts are sometimes also referred to as quasi-con- tracts. A quasi-contract, by contrast, is an obligation said to be ‘‘imposed by law” in order to avoid unjust enrichment of one person at the expense of another. In fact, a quasi-contract is not a contract at all; it is a fiction that the courts created to prevent injustice.

Examples of quasi-contract:

Acarpenter mistakenly believes you have hired him to repair your porch; in fact, it is your neighbor who has hired him. One Saturday morning he arrives at your doorstep and begins to work. Rather than stop him, you let him proceed, pleased at the prospect of having your porch fixed for free (since you have never talked to the carpenter, you figure you need not pay his bill). Although it is true there is no contract, the law implies a contract for the value of the work.

Key Differences Between Express and Implied Contract

The points given below are substantial so far as the difference between express and implied contract is concerned:

1. An express contract is a contract, in which the terms of the contract are verbally communicated between the partied involved. On the contrary, an implied contract can be understood as a contract, which is presumed or believed to be existed between the parties or which is expressed by implication.

2.  In express contract, words are used to manifest contract, which can be oral or written. Conversely, in an implied contract is formed out of the deeds or conduct of the parties concerned.

3.  Trust agreement between the author and trustee is an example of an express contract.As against, receiving cash from automated teller machine is a great example of implied contract.

Difference between Express contracts and Quasi-contracts

Quasi-contracts are a type of contract wherein obligation is imposed by law. For example, when a person is a finder of lost goods, there is some degree of obligation that is imposed on them to find the owner of the goods. In essence, a contract is formed without there

25

being any intention to enter into a contract. This is the place where quasi-contracts become different that express contracts. In express contracts, through the clear expression of offer and acceptance, there must be absolute intention to enter into a contract and create legal relations. On the other hand, quasi-contracts are formed irrespective of contracts.

MORE ON EXPRESS CONTRACTS

A contract in which the parties directly exchange a mutual pledge to be bound by specified obligations and expressly establish their purpose and readiness to be legally committed to carrying out their responsibilities is known as an express contract. The way they are formed distinguishes an express contract from an implicit contract. While an express contract is made when the parties indicate their wish to be bound by the contract, implicit contracts are formed when the parties’conduct is assessed without regard to their intent.

Overall, express contracts are the easiest contracts to make. They are also more desirable as it relies on clear words which are less open to interpretation when compared to actions and gestures. Express contracts are thus, most easy to enforce in courts, because of all their above-mentioned characteristics.

MORE ON IMPLIED CONTRACTS

Unlike written contracts, these are entirely based on the actions of the two sides involved. There is no written document to affirm anything. Implied contracts are also honoured based on actions executed in the past. Everything is understood and abided by without having to read anything. However, it becomes imperative for some contracts to be written in detail to avoid any and all misunderstandings that could take place. Some situations and activitiesmake written contracts absolutely necessary. Some of these include, e.g., the sale of commercial and individual land and property and even contracts which take more than 12 months to be completed. These could include the

26

lease of some real estate or even a mortgage agreement of a personal or commercial vehicle. Written contracts help to build trust, and both sides become confident. They also help boost healthy relationships as none of the parties involved fails to live up to the contract terms.

Suggested activities

Frequently asked questions

Q: What is the best-implied contract definition that explains its meaning in detail?

Ans:An implied contract can be best defined as an unwritten pact or agreement between two groups or individuals based on the circumstances or their behavior. This type of contract is legally binding on both the parties involved in the agreement.

Q: What is implied contract meaning in simple words?

Ans: In simple words, it means two individuals or two groups enter into an agreement pertaining to some goods and services. Such a contract is established on the actions and conduct of the individuals involved and not documented. Though it is not a written agreement, both sides are legally bound by it.

Q: What is an ideal implied contract example?

Ans:An ideal example is a person visiting a restaurant and orderingameal.Thepersonisexpectingserviceintheformofthemealthey order. The person is aware that the meal will be served and payment has to be made for the same. You don’t enter a restaurant and write down an order for a meal which you then submit. You place an order because your meal will be served, and you will have to pay for it.

Q: What is an implied contract?

Ans:Animpliedcontractisanunwrittenagreement,anditisbased ontheconductandtheactionsofthetwosidesinvolvedinthecontract. Though there is nothing in writing, both sides are in mutual agreement towards the commitment of the contract in a fair manner. An implied contract is as legally binding as a written contract, and both parties are expected to honor it.

27

UNIT 5

T Y P E S O F C O N T R A C T S

O N T H E B A S I S O F E X E C U T I O N

EXECUTORY CONTRACTS AND EXECUTED CONTRACTS

Basics of Executing a Contract

Before signing, or “executing” a contract, it is very important for all parties involved to read and understand all of the terms contained within. Some contracts contain legal jargon or information that may be difficult to understand. In this case, having an experienced attorney review the contract before signing helps protect the parties from entering into an agreement they are unable or unwilling to fulfill.

Definition of Executory Contract

An executory contract is a contract made by two parties in which the terms are set to be fulfilled at a later date. The contract stipulates that both sides still have duties to perform before it becomes fully executed. The contract is often in place between a debtor or borrower and another party.

Types of Executory Contracts

There are many types of executory contracts, some more complex than others:

  Rental lease: Tenant is required to pay the landlord rent; landlord required to provide living space.

  Equipment lease: Borrower must pay rent on the equipment borrowed; renter must provide equipment.

28

  Development contract: Contractor receives payment from the owner when building milestones are complete; contractor performs duties for the building owner.

  Car lease: Consumer makes lease payments to the dealership; the dealership provides the car in return.

Examples of Executory Contracts

  Garry has been looking at a TV he wants to purchase. After some debate, he finally decides to go lease it instead. John enters the electronics store, signs a lease agreement that states the he will pay $100 per month until the purchase price has been paid in full. Until John makes the final payment, the contract has not been fulfilled.

  Michael has been looking at a car he wants at a car lot, debating whether to buy it. Finally deciding to make the purchase, Michael walks into the dealership, signs a lease contract agreeing to pay a specified amount each month until the car is paid off, or he returns the car at the end of the lease. Until the car is either paid off or returned, the terms of the contract have not been fulfilled.

Breaching an Executory Contract

Either party to a contract can breach that contract by failing to fulfill their duties as outlined in the agreement. For example, if Jim enters into an executory contract to lease a car, then fails to make the required monthly payments, he has breached the contract.As a result, the dealership may repossess the car, and sue Jim in civil court for uncollected payments.

Executory Contracts in Bankruptcy

When an individual who is party to an executory contract files bankruptcy, he is not automatically relieved from his performance under the terms of the contract. His options include (1) confirming in writing that he intends to continue to fulfill the terms of the contract, or (2) rejecting the contract within the bankruptcy. As an example, if Jim wants to keep his leased car, he can reaffirm the lease, keep the car, and continue making the lease payments as agreed. If he wants to be relieved of the burden of lease payments, Jim can return the car to the dealership and put the contract into the bankruptcy.

29

Consulting a Bankruptcy Attorney

The rules governing executory and other contracts in bankruptcy are very complex. An experienced attorney can help explain the laws and ensure that the rights of the debtor are protected.

Related Legal Terms and Issues

  Bankruptcy – a legal process that takes place when a person or business is unable to pay their outstanding debts.

  Debtor – a person or entity that owes money or property to another person or entity

  CivilSuit–acaseinwhichapersonwhofeelshebeenwronged brings legal action against another person or entity to collect damages from the person who wronged them.

  Legal Jargon – unnecessarily complicated or technical language used in contracts or detailed documents.

Definition of Executed Contract

An executed contract is a legal document that has been signed off by the people necessary for it to become effective. The contract is often made between two or more people, but it can also be between a person and an entity, or two or more entities. Contracts often specify that one party will provide a service or goods to the other, and are not fully effective until all parties involved have signed. Some contracts even require the signatures be witnessed.To explore this concept, consider the following executed contract definition.

An executed contract is an agreement or contract between two or more parties that has been signed and is binding to all parties involved. It is a fully implemented contract.

Types of Contracts

Many types of documents and legal forms may be executed to ensure they become effective and binding. The most common documents that require execution include contracts between two or more parties, such as lease agreements, contracts for services, and sales contracts. Suchdocuments bind thepartiestocarryoutthetermsoftheagreement.

30