Implied Contract

What is an Implied Contract?

An implied contract is a legally enforceable agreement created by the behavior or circumstances of the parties involved rather than through written or spoken terms. Unlike express contracts, where the terms are explicitly communicated, implied contracts arise from the conduct of the parties that indicates a mutual intention to form a contract. These contracts carry the same legal weight as written agreements, even though the terms are not expressly defined.

Types of Implied Contracts

There are two main types of implied contracts:

Implied-in-Fact Contract

An implied-in-fact contract is formed when the parties’ actions or conduct suggest that an agreement has been made, even if no verbal or written exchange occurs. For instance, if a person visits a doctor, it is implied that they will pay for the medical services provided, even if no specific agreement on payment is discussed beforehand.

Implied-in-Law Contract (Quasi-contract)

An implied-in-law contract, often referred to as a quasi-contract, is not based on the parties’ intentions but is instead imposed by a court to prevent one party from being unjustly enriched at the expense of another. This type of contract ensures fairness, especially in situations where no mutual agreement existed but one party benefited from another’s actions.

Common Examples of Implied Contracts

Implied contracts are common in everyday situations. Some examples include:

• Receiving professional services: If someone receives services from a professional, such as visiting a doctor or lawyer, it is implied that they will compensate the provider, even if payment terms are not explicitly discussed.
• Restaurant dining: When a person orders food at a restaurant, it is implied that they will pay for the meal after consuming it, even if no explicit agreement is made about payment when they place the order.
• Employer-employee relationships: In some cases, an implied contract can exist between an employer and employee, where the terms of employment are not fully written out but are inferred from the actions and established practices.

Legal Basis for Enforcing Implied Contracts

For an implied contract to be legally enforceable, certain elements must be present, including mutual intent, an offer and acceptance (implied by actions), and consideration (something of value exchanged). Courts often look at the circumstances and the behavior of the parties to determine whether an implied contract exists. If proven, the contract can be legally upheld, just like an express contract.

In some cases, courts will enforce an implied contract to avoid unfair outcomes, especially if one party was unjustly enriched. Quasi-contracts, in particular, are created by the court to ensure justice is served, even without an expressed agreement.

Key Differences Between Implied and Express Contracts

• Form of Agreement: An express contract is clearly stated through written or spoken words, whereas an implied contract is inferred from actions or circumstances.
• Clarity of Terms: Express contracts outline the specific terms of the agreement, while implied contracts rely on the conduct of the parties, which can lead to ambiguity regarding the terms.

Frequently Asked Questions

How can you prove the existence of an implied contract?

To prove an implied contract, you must demonstrate that the actions or conduct of the parties indicate a mutual understanding and agreement. Courts will consider whether services were rendered, whether the recipient accepted the benefits, and whether the behavior aligns with a contractual agreement.

Are implied contracts legally binding?

Yes, implied contracts are legally binding. Despite the absence of written or verbal terms, courts can enforce them if they meet the necessary elements of contract formation, such as mutual intent and consideration.

Can implied contracts be contested?

Yes, implied contracts can be contested, especially if one party disputes the existence of the contract or if the terms are unclear. However, courts often rule based on the conduct of the parties and the fairness of the situation.