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Express/Implied Contracts: Real Estate License Explained

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In the world of real estate, contracts are an essential component of any transaction. They serve to define the rights and obligations of the parties involved, providing clarity and legal protection. One type of contract that is commonly encountered in the real estate industry is the express/implied contract.

What is Express/Implied Contracts

Express contracts, as the name suggests, are agreements that are explicitly stated and agreed upon by all parties involved. These contracts outline the specific terms, conditions, and expectations of the transaction. They can be in written or verbal form, although written contracts are generally preferred for their clarity and enforceability. On the other hand, implied contracts are those that are formed by the actions and conduct of the parties involved, rather than by explicit written or verbal agreement.

Express contracts are commonly used in business transactions, real estate deals, and employment agreements. In a business setting, an express contract can clearly define the roles and responsibilities of each party, the payment terms, and any other important details of the agreement. This helps to prevent misunderstandings and disputes down the line. Real estate contracts often involve express terms regarding the property being bought or sold, the price, and the timeline for the transaction to take place. Similarly, employment contracts outline the job duties, compensation, benefits, and termination clauses to protect both the employer and the employee.

Understanding Express/Implied Contracts

Express contracts are often used in real estate transactions to lay out the details of the agreement, such as the purchase price, the closing date, and any contingencies or special provisions. These contracts provide a clear framework for both the buyer and the seller, ensuring that their rights and responsibilities are clearly defined.

Implied contracts, on the other hand, can arise in real estate when there is a reasonable expectation of certain terms based on the conduct of the parties involved. For example, if a buyer makes an offer on a property and the seller accepts it without explicitly discussing the terms, an implied contract may be formed based on the understanding that the buyer will pay the agreed-upon price and the seller will transfer ownership of the property.

It’s important to note that express contracts are typically preferred in real estate transactions because they leave less room for interpretation or misunderstandings. By clearly outlining the terms of the agreement in writing, both parties can refer back to the contract if any disputes arise during the transaction process.

On the other hand, implied contracts can sometimes lead to disagreements between the parties involved, as the terms are not explicitly stated and may be subject to differing interpretations. This is why it’s crucial for all parties in a real estate transaction to communicate openly and ensure that their intentions and expectations are clearly understood by each other.

Why Is Express/Implied Contracts Important?

Express and implied contracts play a crucial role in real estate transactions due to their ability to provide clarity and protect the rights of the parties involved.

Express contracts help to minimize the potential for misunderstandings and disputes by clearly outlining the terms and conditions of the agreement. By having these terms in writing, all parties have a clear understanding of their rights and obligations, reducing the likelihood of disagreements and legal disputes down the line.

Implied contracts, while not as explicit as express contracts, still serve an important purpose by filling in any gaps in the agreement. They help to ensure that both parties are on the same page and uphold their responsibilities as expected in the transaction. This can be particularly important in situations where the parties may not have explicitly discussed every detail of the agreement.

Furthermore, express contracts are often preferred in real estate transactions due to their specificity and enforceability. These contracts leave little room for interpretation, as the terms are clearly defined and agreed upon by all parties involved. This level of clarity can be crucial in complex real estate deals where large sums of money and valuable assets are at stake.

On the other hand, implied contracts can sometimes be more flexible in nature, allowing for a degree of adaptability in situations where unforeseen circumstances arise. While they may not provide the same level of certainty as express contracts, implied contracts can help maintain a sense of fairness and equity between the parties involved, especially when certain expectations are implied based on the actions and conduct of the parties.

Example of Express/Implied Contracts

Let’s delve deeper into the world of express and implied contracts, especially within the intricate realm of real estate transactions. Consider a scenario where a buyer and a seller engage in negotiations over a property. As they discuss terms and eventually settle on a purchase price, a subtle dance of legal implications begins. The moment they shake hands and verbalize their commitment to the deal, an implied contract materializes. This unspoken agreement carries with it the weight of expectations – the buyer is poised to deliver the agreed-upon funds, while the seller is prepared to transfer the property’s ownership.

Now, let’s add a layer of complexity to our scenario. Picture the buyer taking the initiative to draft a comprehensive purchase agreement, meticulously detailing every aspect of the deal – from the price to contingencies and the timeline for closing. By putting pen to paper and formalizing their arrangement, both parties transition from the realm of implied contracts to that of express contracts. This tangible document serves as a beacon of clarity and assurance, offering a concrete reference point for all involved.

But what happens if unforeseen circumstances arise, throwing a wrench into the meticulously laid plans? In such instances, the nuances of express and implied contracts truly come to the forefront, guiding the parties through uncharted waters of renegotiation and potential resolution. The dance between explicit obligations and implicit understandings continues, shaping the course of the transaction and underscoring the importance of clear communication and mutual trust in the realm of real estate contracts.

Why Is Express/Implied Contracts Important in Real Estate?

In the realm of real estate, where high-value assets are being transferred, express and implied contracts are of paramount importance. These contracts help to protect the interests of buyers, sellers, and other parties involved in the transaction, ensuring that everyone is held accountable to their obligations.

By having clearly defined contract terms, real estate professionals can operate with more confidence and reduce the risk of disputes or misunderstandings. Both buyers and sellers can proceed with the transaction knowing exactly what is expected of them and what they can expect from the other party.

Express contracts in real estate are those in which the terms are explicitly stated either verbally or in writing. These contracts leave little room for interpretation, as the obligations of each party are clearly outlined. On the other hand, implied contracts are not explicitly stated but are inferred from the actions and conduct of the parties involved. For example, when a seller allows a potential buyer to conduct a home inspection, there is an implied contract that the seller will not conceal any major defects.

Understanding the nuances of express and implied contracts is crucial in real estate transactions to ensure that all parties are protected and that the deal proceeds smoothly. Real estate agents and brokers play a vital role in drafting and explaining these contracts to their clients, guiding them through the process and ensuring that their rights are upheld.


In the complex world of real estate transactions, express and implied contracts play a crucial role in ensuring clarity, protecting parties’ rights, and minimizing the potential for disputes. Express contracts give specific terms and conditions in writing, while implied contracts arise from the parties’ conduct and reasonable expectations. Both types of contracts are essential to create a solid foundation for a successful real estate transaction.

Whether you’re a buyer, seller, or real estate professional, understanding express and implied contracts can provide you with confidence and peace of mind when navigating the twists and turns of the real estate market. So, the next time you engage in a real estate transaction, remember the importance of these contracts and ensure that your rights and obligations are clearly defined.

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