Express contract

Key Takeaways

• An express contract states every element in words, spoken or written, so nothing has to be read into the parties' conduct.
• RCW 19.36.010 voids an agreement employing a broker to sell or purchase real estate for a commission unless it is in writing and signed by the party to be charged.
• RCW 18.86.020 requires a Washington firm to have a services agreement with its principal, which makes agency here an express arrangement rather than an assumed one.
• Express and implied describe how a contract was formed. Valid, void, voidable, and unenforceable describe whether a court will enforce it.

What It Means

An express contract is one where the parties said what they meant. Every element, the offer, the acceptance, the price, the timing, and the duties, appears in words the parties used, whether spoken across a kitchen table or typed into a form. The counterpart is an implied contract, where a court reads an agreement out of what the parties did rather than what they said. A Listing Agreement is an express contract. So is a Purchase And Sale Agreement, and so is a spoken promise to pay a handyman $400 to repaint a fence.

The distinction matters because it decides what a court has to work with. In an express contract the stated terms are the evidence, and a judge can point to the sentence that settles the dispute. In an implied contract the conduct is the evidence, and the parties end up arguing about what a reasonable person would have understood. In real estate the safe move is to make the contract express and put it in writing, because Washington refuses to enforce several categories of real estate agreement unless they are signed and on paper. A disciplined contract review habit is how brokers keep that from becoming a problem.

How It Works in Washington

Washington narrows the choice for licensees. RCW 19.36.010 makes an agreement void unless it is in writing and signed by the party to be charged in five listed cases, and subsection (5) is the one brokers live with: an agreement authorizing or employing an agent or broker to sell or purchase real estate for compensation or a commission. An oral listing may be a perfectly clear express contract, and in Washington it is still a void one. That is the Statute Of Frauds doing its job.

Two more rules push the same way. RCW 64.04.010 says every conveyance of real estate, and every contract creating or evidencing an encumbrance on real estate, shall be by deed. And RCW 18.86.020(2)(a) requires a firm to enter into a services agreement with the principal before, or as soon as reasonably practical after, its appointed broker commences rendering real estate brokerage services. RCW 18.86.010 defines that services agreement as a written agreement between the firm and the principal, and RCW 18.86.080(7) ties the firm's right to compensation to having one. So the Written Services Agreement is the express contract that opens the relationship. Our guide to Washington's written services agreements walks through the required terms.

Example

Dana Whitfield runs into broker Ken Ito at an open house in Kent and asks him to list her rental on Meeker Street, promising him 3 percent of the sale price. Ken markets the property, finds a buyer at $525,000, and asks for his $15,750. Dana refuses to pay. Their conversation was an express contract, because both sides stated the property, the job, and the fee in words. It was also oral, and RCW 19.36.010(5) voids an agreement employing a broker to sell real estate for a commission unless it is in writing and signed by the party to be charged. Ken has no claim for the commission. Had Dana signed a one-page listing agreement naming the same 3 percent, Ken would hold the identical deal in an enforceable form. Ken's problem was never that his contract was vague. It was specific, and it was in the wrong medium.

Common Mistakes and Exam Traps

• An oral express contract is still an express contract. Being oral affects whether a court will enforce it, not how it is classified.
• Express versus implied is about how the agreement was formed. Bilateral versus unilateral is about how many promises were exchanged. Exams mix the two pairs on purpose.
• In Washington an oral agreement to pay a broker a commission is void under the statute of frauds, not merely voidable, so proving the conversation happened does not rescue it.
• A contract implied in fact is inferred from what the parties did. A claim for unjust enrichment is a remedy a court imposes when there was no agreement at all, so treating the two as the same thing is a trap.