Definition
An implied contract is a type of agreement that is not expressed directly through written or spoken words but is inferred from the conduct, actions, or circumstances of the parties involved. Implied contracts can be either implied-in-fact or implied-in-law (also known as quasi-contracts).
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Implied-in-Fact Contract: This is created by the circumstances and conduct of the parties. For example, when you visit a restaurant, it is implied that you will pay for the food ordered.
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Implied-in-Law Contract (Quasi-Contract): This type of contract is imposed by law to prevent unjust enrichment, even if there was no agreement between the parties.
Examples
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Restaurant Scenario: When you dine at a restaurant, it’s understood that you will pay for the meal you ordered. Nobody specifically states the terms, but your actions imply the agreement.
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Doctor’s Visit: If you visit a doctor, it is implied that you will pay for the medical services rendered, even if no explicit payment arrangement is discussed beforehand.
Frequently Asked Questions (FAQs)
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What is the difference between an implied-in-fact contract and an implied-in-law contract?
- An implied-in-fact contract is inferred from the actions of the parties, while an implied-in-law contract is imposed by the court to prevent unjust enrichment.
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Are implied contracts legally enforceable?
- Yes, implied contracts are legally enforceable, but proving their terms can be more challenging than with written or spoken contracts.
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Can an implied contract override a written agreement?
- Generally, no. Written agreements typically take precedence over implied contracts because they provide clear documentation of the contract’s terms.
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Do implied contracts need to meet all the elements of a valid contract?
- Yes, implied contracts must meet the essential elements of a valid contract, including offer, acceptance, consideration, mutual intent, and legality.
- Statute of Frauds: A legal doctrine that requires certain contracts to be in writing in order to be enforceable, such as those involving significant amounts of money, real estate transactions, or agreements that cannot be performed within a year.
Online References
Suggested Books for Further Studies
- “Contract Law: Selected Source Materials Annotated” by Steven J. Burton, Melvin A. Eisenberg
- “Principles of Contract Law” by Robert A. Hillman
- “Understanding Contracts” by Jeffrey Ferriell
Fundamentals of Implied Contract: Business Law Basics Quiz
### Can implied contracts be enforced in a court of law?
- [x] Yes, implied contracts can be enforced.
- [ ] No, they are not enforceable.
- [ ] Only in some states.
- [ ] Only if they involve real estate.
> **Explanation:** Implied contracts can be enforced in court as they are considered valid agreements, despite not being written or spoken explicitly.
### How is an implied-in-fact contract created?
- [x] Through the conduct of the parties.
- [ ] By signing a written document.
- [ ] By verbal agreement.
- [ ] Through email communication.
> **Explanation:** An implied-in-fact contract is created by the conduct or circumstances of the parties involved, indicating an agreement.
### What type of contract requires the prevention of unjust enrichment?
- [ ] Written contract
- [ ] Oral contract
- [x] Implied-in-law contract
- [ ] Employment contract
> **Explanation:** An implied-in-law contract, also known as a quasi-contract, is created to prevent one party from being unjustly enriched at the expense of another, even if no actual agreement exists.
### Which law requires certain contracts to be in writing?
- [ ] Contract Law
- [ ] Common Law
- [x] Statute of Frauds
- [ ] Tort Law
> **Explanation:** The Statute of Frauds requires certain types of contracts, like real estate and agreements that cannot be performed within a year, to be in writing to be enforceable.
### What serves as “consideration” in an implied contract?
- [x] The services or actions performed.
- [ ] A written promise.
- [ ] A verbal promise.
- [ ] A signature.
> **Explanation:** In an implied contract, consideration refers to the services or actions performed, which show that a reciprocal understanding or agreement exists.
### Can an implied contract exist without a written document?
- [x] Yes, implied contracts do not require a written document.
- [ ] No, a written document is always required.
- [ ] Only in certain professions.
- [ ] Only in business contexts.
> **Explanation:** An implied contract does not need a written document to be valid. It is established through the actions and conduct of the involved parties.
### In the context of implied contracts, what does "mutual intent" mean?
- [ ] A written agreement signed by both parties.
- [x] The intention to form an agreement understood by both parties.
- [ ] Communication via electronic methods.
- [ ] Verbal understanding only.
> **Explanation:** Mutual intent refers to the shared intention of both parties to enter into an agreement, which can be inferred through their conduct and actions in an implied contract.
### What typically signifies the existence of an implied contract at a restaurant?
- [x] Ordering and consuming food.
- [ ] Signing a menu.
- [ ] Verbally agreeing to the price.
- [ ] Calling ahead for reservations.
> **Explanation:** Ordering and consuming food at a restaurant signifies an implied contract where the customer is expected to pay for the services received.
### Under what circumstance can a quasi-contract arise?
- [ ] When terms are verbally agreed.
- [x] To prevent unjust enrichment.
- [ ] When a legal document is lost.
- [ ] When a third party is involved.
> **Explanation:** A quasi-contract arises to prevent one party from being unjustly enriched at the expense of another, ensuring fairness even in the absence of a formal agreement.
### Can courts impose terms in an implied-in-law contract?
- [x] Yes, courts can impose terms.
- [ ] No, terms must be agreed upon by the parties.
- [ ] Only in commercial transactions.
- [ ] Only if both parties consent in writing.
> **Explanation:** Courts have the authority to impose terms in an implied-in-law contract (quasi-contract) to rectify situations where one party has been unjustly enriched.
Thank you for delving into the intricate world of implied contracts with us. Grasping these foundational concepts will significantly benefit your understanding and application of business law.
