What Is the Purpose of Implied Contracts?
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What Is the Purpose of Implied Contracts?

An implied contract, possessing the same legal validity as a written or verbal contract, can be formed based on the involvement, behavior, or circumstances of individuals without requiring explicit confirmation. Implied contracts, like implied warranties, are assumed to exist without requiring explicit confirmation. However, enforcing an implied contract can be challenging in certain situations due to the absence of documentation.

Basics

An implied contract is a legally-binding obligation arising from the actions, conduct, or circumstances of parties involved in an agreement. It holds the same legal force as an express contract, voluntarily agreed upon verbally or in writing by two or more parties. Unlike an express contract, an implied contract is assumed to exist without requiring written or verbal confirmation.

Implied Contracts and Enforcing Them

An implied contract operates on the principles of fairness, ensuring that no individual benefits unjustly at the expense of another, without the need for a formal written or verbal agreement. An example of this is the implied warranty, where the purchase of a product assumes its capability to fulfill its intended function. For instance, when buying a new refrigerator, it is expected to keep food cool; failing to do so would breach the terms of the implied contract.

However, enforcing an implied contract can be complicated as it requires arguments and evidence to establish its fairness, unlike a straightforward signed document. Furthermore, some jurisdictions impose limitations on the application of implied contracts. For certain court cases involving real estate transactions, a written contract may be necessary to support the implied contract's validity. Despite holding the same legal weight as written contracts, enforcing an implied contract can prove to be more challenging in practice.

Challenges Related to Implied Contracts

Implied contracts hold legal enforceability and are recognized in court. However, proving their existence can be more challenging than contracts formed through oral or written agreements. Courts typically examine factors such as the parties' relationship, any previous agreements, and the duties performed to determine the validity of an implied contract.

Implied Contracts Requirements

Implied contracts can be of two types, each with its own requirements. They are not formed through oral or written agreements. An implied-in-fact contract necessitates an offer, acceptance, mutual agreement, and consideration. The terms and execution of the contract are evident from the behavior of the involved parties. In contrast, an implied-in-law contract is formed based on circumstances rather than intent. When services or goods are not provided for free, the receiver must offer consideration. Both parties should benefit fairly, avoiding any unjust enrichment.

Two Forms of Implied Contracts

There are two primary types of implied contracts: implied-in-fact contracts and implied-in-law contracts (quasi-contracts).

Implied-in-Fact Contracts

An implied-in-fact contract is created through actions and behavior. For instance, a customer ordering food at a restaurant forms an implied contract with the owner. The owner must serve the food as requested and the customer pays the listed prices. Such contracts can also arise from past conduct. For example, if a teenager consistently receives two movie tickets for walking a neighbor's dog, it implies a contract. If the neighbor stops providing tickets, the teenager may claim a breach of the implied contract.

To create an implied-in-fact contract, certain elements must be present, including an offer, acceptance, mutual agreement, and consideration. These contracts can be legally binding and carry the same weight as express contracts formed through explicit written or verbal agreements.

Implied-in-Law Contracts

On the other hand, implied-in-law contracts, also known as quasi-contracts, are unintentionally created contracts imposed by law to prevent unjust enrichment. For instance, if a restaurant patron chokes on a chicken bone and a doctor dining nearby provides immediate medical aid, the doctor can send a bill to the diner. The diner is then obligated to pay for the services rendered, despite there being no prior agreement between them. Implied-in-law contracts are designed to ensure fairness and prevent one party from taking advantage of another in certain situations.

What Is an Express Contract?

Contracts can be categorized as express or implied. Both types require mutual agreement and a meeting of the minds. An express contract is formally arranged through a written or oral agreement, while an implied contract is formed through the circumstances or actions of the parties involved.

For instance, a real estate contract falls under the category of an express contract, which must be in writing to be enforceable. On the other hand, ordering a pizza from a restaurant is an example of an implied contract. Once the purchase is made, the restaurant is obligated to provide the pizza to the customer.

Conclusion

Implied contracts can be just as legally binding as express contracts, but enforcing them can be more challenging. They can arise from the behavior or circumstances ofthe parties involved, and there are two types: implied-in-fact and implied-in-law contracts. Implied contracts operate on the principles of fairness and are designed to ensure that neither party benefits unjustly at the expense of the other. Although these contracts are legally enforceable, proving their existence can be more complicated than that of express contracts.

Implied Contracts
Implied-in-Fact Contract
Implied-in-Law Contract
Quasi-Contracts
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