Texas law recognizes written contracts and oral contracts. However, there are other categories of contracts that may have implications under the law. Texas law recognizes the following four types of contracts: express contracts, implied-in-fact contracts, quasi-contracts, and unilateral/bilateral contracts.
Express contracts. An express contract is essentially the written contract that most people envision when they think of contracts. The parties negotiate, mutually agree to, and write all of the terms in the contract. Indeed, that is where the express contract gets its name from: the terms are expressly stated in the contract.
The second type of contract is an implied-in-fact contract. This type of contract relies on the facts and circumstances of the specific case. A court will generally employ the implied-in-fact contract theory to find that the parties had a contract based on the way they acted. What is important is that there is some meeting of the minds between the parties in the implied-in-fact contract. For example, if Party A walks into a restaurant and orders food, there is an implied contract that the restaurant will provide Party A with food and Party A will pay for the food. The contract in this example is implied by the facts and circumstances of the case.
The third type of contract is a quasi-contract. A quasi-contract is similar to an implied-in-fact contract and is sometimes referred to as an implied-in-law contract. With a quasi-contract, courts look to impose obligations on the parties even if the parties did not make any express promises. The court does this in the interest of justice. Importantly, a quasi-contract claim cannot exist in a lawsuit if there is an express contract that covers the disputed issue between the parties.
Finally, there are unilateral and bilateral contracts. A unilateral contract exists where one party promises a benefit if the other party performs, or does some act. In a unilateral contract there is no exchange of promises, only an exchange of performances. On the other hand, a bilateral contract exists when two parties exchange promises that are equally beneficial to the other party.
For more on contracts, see our Insights posts:
- Breach of Contract in Texas
- Force Majeure and Coronavirus: “Act of God” or Breach of Contract?
- Duress as a Defense to Breach of Contract in Texas
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