Introduction
When we think about the contract, a common thing that comes to mind is a written contract. Contract parties put it in writing when they agree with each other’s terms and conditions. However, there is no mandatory term, and every contract must have been in written form. Some of them agree to perform, which may be verbally, expressively, or by act. However, all of them have legal existence. In this article, we address an implied contract, the meaning of an implied contract, the conditions under which it applies, etc.
What is an implied contract?
An implied contract is classified into two types: implied-in-fact and implied-in-law contracts. Regarding the definition, both are similar, but both contracts differ. So, let’s see how they differ.
Implied-in-fact contract
An implied-in-fact contract occurs when parties enter the contract with the same terms and conditions. In other words, an implied-in-fact contract is made of an implied. That contract may have been made in the past with an obligation, which is implied as an arrangement in the future. It creates clear words rather than verbal conduct.
Implied-in-law contract
An implied-in-law contract is different from an implied-in-fact contract. In an implied-in-law contract, the contracting parties are not directly involved. Sometimes, the contracting party does not intend to enter the contract, but due to surrounding circumstances, such a contract occurs. An implied-in-law contract is also known as a quasi-contract.
Example of implied contract
To better understand, let’s refer to some examples of implied contract that is given below;
Example of Implied-in-fact contract
As mentioned above, an implied-in-fact contract means contract parties enter the contract with some obligation, terms, and conditions in writing or oral form. Suppose a contracting party A entered into an agreement with B to remove lawn grass for B, and contracting party B agrees to pay a certain amount for that task. It is an implied-in-fact contract. Suppose B does not fulfill its obligation by not paying a certain amount mentioned in a contract. A contracting party, A, can file a suit against B for their unpaid amount. And can claim against B for the part performance of a contract.
Example of Implied-in-law contract
An implied-in-law means when an agreement comes without transpiration and intention. Suppose a contracting party A asks another contracting party B to provide a transportation service to party C, which is not a contracting party in real. B provides service to C and performs his part as suggested by A. If contract party A declines to pay for that service provided by B to C, contract party B is entitled to claim his service. Party C is required to pay a bill for the service.
Enforceability of implied contract
An implied contract can be enforced in the case of a breach. If the contracting party fails to perform its part, you can find a source to recover your due payment. If the contract is written, there can be many ways to enforce it, such as using a mediator, going through arbitration, filing a suit, etc.
When a contract is written, the contract parties mention their terms, conditions, and responsibilities to each other. As per that agreement, the contracting party is legally bound to follow such a contract.
In an implied-in-fact contract, there are different methods that you need to follow for enforcement. You need to prove that the contract parties agree to enforce that contract. Here, it would help if you were provided with evidence of the other party’s behavior and how they unjustly reacted when you offered them services or delivery of goods.
Contracts that you must enter in writing form
Some contracts are advisable to put in writing form so the contract parties can protect their rights in the case of breach of contract and can approach the court of law. According to various contract laws, some contracts must be written in writing to fulfill the legally binding effect. Some of them are given below;
- A contract of sales of land and real estate.
- The property lease agreement is for more than one year. You need to enter such contracts for more than one year.
- A promissory note over an amount that exceeds what the state recognizes.
- Some sales of services or goods exceed the state’s recognized amount.
Those kinds of above contracts must be spelled out in written form, which helps the contracting parties make legally binding effects that can be enforced in a court of law.
How do we avoid implied contracts?
As we know, an implied contract comes out of unexpected circumstances. However, that can be avoided by observing and carefully dealing with affected parties. To avoid that situation, you must carefully communicate your intention when dealing with a party.
What are the pros and cons of an implied contract?
Let’s see here below what are the advantages and disadvantages of implied contract;
Advantages
- There is no requirement that two or more parties enter into a contract with their mutual understanding.
- It reduces administrative work and legal formalities so parties can save time and cost.
Disadvantages
- It is not easy to enforce because of a lack of proper documentation and proof of evidence.
- Sometimes, it creates some confusion when different people assume different things.
Difference between implied contract, quasi-contract, and express contract
All of these contracts seem to be similar, but there are some differences between them, which are given below;
In an implied contract, the parties agree with nonverbal consent. But if we talk about an express contract, the contract parties enter into a written agreement. A quasi-contract comes out when the parties to this contract do not agree. Such a contract ensures that the parties cannot take unfair advantages. On that basis, that contract can be enforced in court.
Offer and acceptance are necessary to make a legal and valid contract. In implied and express contracts, the consent of the contract parties exists and continues during the contract. In a quasi-contract, the parties have no consent to join such a contract. That contract is created when the parties do not intend to enter it.
Conclusion
An implied contract results from the contracting parties’ conduct, act, or situation. It is legally binding for the involved parties rather than a clear written document or verbal communication. That contract is specified in two parts: an implied-in-fact contract, which is made of an implied, and an implied-in-law contract, which shows it is made without transpiration and intention.
Also Read:
What is the Standard Form Of Contract?
What is an Unenforceable Contract under the Contract Law?
What Is A Formation Of A Contract?
