Implied Contract
Candlefocus EditorWhat is an implied contract? An implied contract is a legally binding agreement between two or more parties, where the terms of the contract are inferred but not explicitly stated. This differs from a typical “express” contract where the terms are expressed in words at the time of the agreement. An implied contract can be created through the actions, behavior, or circumstances of the people involved, giving the agreement the same legal force as a written or verbal contract.
Implied contracts are particularly useful when dealing with verbal agreements or those without paperwork or signatures. Implied contracts take into account the agreements that were assumed to be in place but where the details were never explicitly stated.
Examples of implied contracts
Implied contracts can be used in a variety of situations. Among the more common examples of implied contracts are:
* Implied Employment Contracts: An implied contract relationship arises between an employer and an employee based on their actions and expectations from the job. This type of agreement is assumed and is often created via a performance of services, even where no explicit contract exists.
* Implied Warranties: Implied warranties are promises made by one party in goods or services. There may not be a formal or written agreement in place, but the implied agreement gives the customer certain rights of satisfaction.
* Implied in Fact Contracts: Implied in fact contracts are agreements where the exchange of goods or services has been completed, and the involved parties explicitly agreed to certain conditions. An example of an implied in fact contract would occur where a customer purchases a item and the seller tells the customer that they have the right to return the item in the event of any issue.
Enforcing Implied Contracts
Due to the lack of documentation, it is more difficult to enforce an implied contract than it is a written or verbal contract. To enforce an implied contract, the plaintiff (the person bringing the claim) must prove the existence of a valid contract and also that the defendant has breached it. The burden of proof is higher for implied contracts, as the plaintiff needs to show all of the necessary elements, such as consideration, capacity, legality, mutuality and agreement.
In some cases, the parties may have assumed an implied contract to exist. However, there are cases where an imposed implied contract may be deemed to constitute a wrongful act due to laws prohibiting the enforcement of an imposed implied contract.
Ultimately, an implied contract can be a valid and enforceable agreement if all of the elements of a legally binding contract exist, regardless of whether they are expressed in words or simply inferred. This can be a valuable legal tool to ensure agreements are honoured and expectations are met.