Contracts are the backbone of legal agreements, providing structure and clarity to our transactions and obligations. But how do contracts come into existence?
Let’s explore the different ways contracts are formed.
Express Contract
An express contract is like a clear roadmap. It is formed when the parties explicitly state their intentions and agreement in either written or spoken words. This type of contract leaves no room for ambiguity, as the terms and conditions are explicitly laid out.
For example, when you sign a written agreement to rent an apartment, both parties expressly state their rights and responsibilities, including the rent amount, lease duration and any additional terms.
Implied Contract
An implied contract is like a silent understanding. It is formed based on the conduct and behaviour of the parties involved, rather than explicit words or written documentation.
In an implied contract, the actions, circumstances or industry customs create an understanding between the parties. Even without a formal agreement, the law recognises the existence of an implied contract to ensure fairness.
For instance, when you go to a restaurant and order food, an implied contract is formed where you agree to pay for the services rendered and the restaurant agrees to serve you.
Quasi Contract
A quasi-contract is like a safety net. It is not a true contract, but rather a legal remedy imposed by the court to prevent unjust enrichment. It is used when there is no actual contract between the parties, but one party has received a benefit at the expense of another.
The court imposes a quasi-contract to restore fairness and prevent one party from unfairly profiting at the expense of another.
For example, if you mistakenly believe a plumber has fixed your leaky pipe and pay them, even though no agreement was made, the court may impose a quasi-contract to ensure the plumber doesn’t benefit unjustly.
Here’s a table summarising the different forms of contract formation:
| Formation | Definition | Example |
| Express Contract | Formed through explicit words or written documentation | Signing a written agreement to rent an apartment with specified terms and conditions |
| Implied Contract | Formed based on the conduct and behaviour of the parties | Ordering food at a restaurant and entering into an agreement to pay for the services |
| Quasi Contract | Not an actual contract, but a legal remedy imposed by the court to prevent unjust enrichment | Paying a mistaken invoice for services that were not agreed upon and the court imposes a quasi-contract to ensure fairness |
Contracts can be formed in different ways. Express contracts arise from explicit agreements, where parties clearly state their intentions. Implied contracts result from actions and conduct that implies an agreement.
Quasi-contracts, although not true contracts are imposed by the court to prevent unjust enrichment.
Note: Access complete CLAT Legal Reasoning notes here.
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