Legal definition of implied contract

Written by maurice spellbinder
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Legal definition of implied contract
Implied Contracts (contract image by martin schmid from Fotolia.com)

People enter into agreements every day with other people. In the broadest sense all these agreements, whether it is to watch the neighbour's house while they are away, or to be home on time after a date, are contracts of a sort we make with one another. When we promise to do something--"our word is our bond"--a social contract has been entered into. That promise may not be spelt out in exact words, or written down, but if acted upon becomes binding upon all parties involved. When these agreements are broken our sense of justice is brought to bear and there may even be legal recourses whether these agreements were in writing or not.

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Implied Contract Definition

An implied contract is an agreement between parties where circumstances have arisen without written expression such that the denial of the existence of the contract would result in unfair or unjust enrichment to one of the parties involved. The conduct of the parties implies assumed intentions on the part of the parties involved or a principle of equity between them has been established.

Explanation of Implied Contract

An implied contract is in place when a one party knowingly accepts some benefit from another party and this benefit cannot be construed as a gift. The benefit is received with the expectation of consideration or fair value on the part of the receiving party.

Implied Contract in Fact

There are two forms of implied contracts: those "implied in fact" and those "implied in law." When an implied contract is implied in fact, it is obvious by the conduct of the parties involved that they have reached an agreement regardless of the contract being expressed (verbally or in print). For example if you go to the dentist and he works on your teeth, there is the expectation that you will pay a fair price for his services. If you refused to pay the dentist, you have broken an implied contract in fact.

Implied in Law or Quasi-Contract

There are laws, which amount to implied contracts, that are designed to prevent the unjust enrichment of one party at the expense of another. These are called "implied in law" contracts or "quasi-contract." They are not strictly speaking "contracts" but are methods by which the courts may legally require one party to compensate another when circumstances have developed where one is benefiting from another without fair value on the part of the receiving party. For example, if an ambulance rushes you to the hospital after you have fallen unconscious you have benefited by the services of the ambulance. Therefore there is an implied by law contract that you will pay for those services though you did not expressly request them.

Express Contracts

An "express contract" is like an implied contract in that neither are written down or signed in a legal format. However, in the case of an "express contract" the elements of a contract are stated specifically between the parties, including an "offer," "acceptance" and "consideration." In this case, it is not simply the circumstances, like those of an "implied contract" but also the stated elements of the contract that define the existence of an "express contract."

At-Will Employment

"At-will" employment is part of American law that allows for the contracting of an employment relationship where either party can end the relationship without liability to either side. This, however, assumes that there is no express contract which defines the employment relationship beyond this interpretation.

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