Legal Definition of Implied Contracts: An Overview

An implied contract is a legally binding agreement between two or more parties that is inferred from their actions or conduct, rather than expressed in writing or verbally. In other words, the parties involved create an agreement through their behavior, without actually stating the terms of the agreement.

Implied contracts are often used in business transactions or employment relationships, where certain terms and obligations are understood by both parties without being explicitly stated. These types of contracts can also arise in other situations, such as landlord-tenant relationships or when a service is provided.

Elements of an Implied Contract

For an implied contract to exist, there must be three basic elements:

1. Mutual intent: Both parties must have intended to create a contract, even if they did not express it in writing or verbally.

2. Offer and acceptance: There must be an offer made by one party and an acceptance by the other party.

3. Consideration: There must be an exchange of something of value, such as goods or services.

Types of Implied Contracts

There are two main types of implied contracts: implied in fact and implied in law.

Implied in fact contracts are created through the actions and conduct of the parties involved. For example, if a customer regularly orders a certain product from a supplier, a contract may be implied that the supplier will continue to provide that product.

Implied in law contracts, also known as quasi-contracts, are created by a court to prevent one party from being unjustly enriched at the expense of another party. This type of contract is not actually a contract at all, but rather a legal fiction to ensure fairness and prevent one party from being unfairly advantaged.

Enforceability of Implied Contracts

Implied contracts are legally binding, just like written or verbal contracts. However, they can be more difficult to enforce because the terms of the agreement are often not clear or specific.

If a dispute arises over an implied contract, the court will look at the actions and conduct of the parties involved to determine the terms of the agreement. This can be a complex process and may require the assistance of legal professionals.

Conclusion

Implied contracts are an important part of many business and employment relationships, as well as other types of transactions. Understanding the elements and types of implied contracts can help parties ensure that their agreements are legally binding and enforceable in court.