An express term is a phrase used in contract law to denote an item that has been agreed to and accepted by all parties to the contract. The term can be oral or written, depending upon the nature of the contract and the understanding of the parties. Either way, once proven, an express term is generally binding upon all who joined in the contract.
A contract is a mutual agreement between two or more parties with the intention of creating a legal obligation. The parties can be people, corporations, or other legally recognized entities, and there must be a promise by one or more parties to undertake some action in exchange for some type of benefit or consideration. In order to be legal, every contract must contain terms that define the obligations of the parties. If these terms are mutually agreed upon and accepted by all involved, they are considered express terms.
Most contracts, especially in the business arena, are written. Consequently, the obligations of the parties are carefully spelled out and become express terms. Sometimes, though, contracts are verbal in nature. In this event, the parties might orally agree to their mutual obligations and, just as in the instance of a written contract, those obligations are considered express terms.
Problems can arise when the parties to a contract disagree as to the meaning or existence of an express term. Even when a contract is in writing, if one or more of the terms are ambiguous and can be reasonably interpreted to mean different things, a law suit could result in which the parties ask a court to decide what the intent really was. Parties who enter contracts with oral express terms could also disagree not only as to the meaning of the terms but also as to whether they were ever part of the contract to begin with. In both instances, other written material along with witness testimony are usually presented to help clarify what the parties said and what was intended.
Oftentimes, an express term is confused with a representation, but they are actually two different things. A representation is a statement made either orally or in writing to induce someone to enter a contract. Ultimately, though, a representation doesn’t always become a part of the contract. For instance, if a person visits a car dealership and the salesperson says that a particular car will save the customer a certain amount of money a year in gas, unless that statement is committed to writing as a mutually agreed part of the purchase contract, it is not an express term but merely a representation meant to convince the customer to buy the car.
For an express term to be enforceable in a court of law, it must also be reasonable. If one party makes an unrealistic promise and it is included in the contract, even if all parties are in agreement as to its meaning and inclusion, it likely won’t be enforced if it is unreasonable. As an exaggerated example, if two people enter into a contact where, for a one-time payment of millions, one party agrees to build a time machine, even though the parties have a mutual understanding and agreement as to their respective obligations, the express terms are unrealistic and won't likely be enforced.
