An implied-in-fact contract is a form of an implied
contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
formed by non-verbal conduct, rather than by explicit words. The
United States Supreme Court
The Supreme Court of the United States (SCOTUS) is the highest court in the federal judiciary of the United States. It has ultimate appellate jurisdiction over all U.S. federal court cases, and over state court cases that involve a point o ...
has defined "an agreement 'implied in fact'" as "founded upon a meeting of minds, which, although not embodied in an express contract, is
inferred
Inferences are steps in reasoning, moving from premises to logical consequences; etymologically, the word '' infer'' means to "carry forward". Inference is theoretically traditionally divided into deduction and induction, a distinction that i ...
, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding."
Although the parties may not have exchanged words of agreement, their conduct may indicate that an agreement existed.
For example, if a patient goes to a doctor's appointment, the patient's actions indicate that they intend to receive treatment in exchange for paying reasonable/fair doctor's fees. Likewise, by seeing the patient, the doctor's actions indicate that they intend to treat the patient in exchange for payment of the bill. Therefore, it seems that a contract actually existed between the doctor and the patient, even though nobody spoke any words of agreement. (They both agreed to the same essential terms, and acted in accordance with that agreement. There was mutuality of
consideration
Consideration is a concept of English common law and is a necessity for simple contracts but not for special contracts (contracts by deed). The concept has been adopted by other common law jurisdictions.
The court in ''Currie v Misa'' declared ...
.) In such a case, the court will probably find that (as a
matter of fact
In classical physics and general chemistry, matter is any substance that has mass and takes up space by having volume. All everyday objects that can be touched are ultimately composed of atoms, which are made up of interacting subatomic par ...
) the parties had an implied contract. If the patient refuses to pay after being examined, they will have
breached
Breached was a Canadian rock band from Toronto, Ontario, active from 2010 to 2015. Its members were Bobby Noakes (vocals), Mike Diesel (guitar/vocals), Ryan Alexander (bass), and Neil Uppal (drums). Mike Diesel was a member of the band Age o ...
the implied contract. Another example of an implied contract is the payment method known as a
letter of credit
A letter of credit (LC), also known as a documentary credit or bankers commercial credit, or letter of undertaking (LoU), is a payment mechanism used in international trade to provide an economic guarantee from a creditworthy bank to an exp ...
.
Generally, an implied contract has the same legal force as an
express contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...
. However, it may be more difficult to prove the existence and terms of an implied contract should a dispute arise. In some
jurisdiction
Jurisdiction (from Latin 'law' + 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, areas of jurisdiction apply to local, state, and federal levels.
Jur ...
s, contracts involving
real estate
Real estate is property consisting of land and the buildings on it, along with its natural resources such as crops, minerals or water; immovable property of this nature; an interest vested in this (also) an item of real property, (more general ...
may not be created on an implied-in-fact basis, requiring the transaction to be in writing.
Unilateral contract
A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...
s are often the subject matter of these types of contracts where acceptance is being made by beginning a specified task.
Potential conduct implying implied contract
* A prior history of similar agreements.
* When recipient accepts something of value knowing other party expects payment.
See also
*
Implied in law contract
A quasi-contract (or implied-in-law contract or constructive contract) is a fictional contract recognised by a court. The notion of a quasi-contract can be traced to Roman law and is still a concept used in some modern legal systems. Quasi Contrac ...
*
Statute of frauds
The Statute of Frauds (29 Car 2 c 3) (1677) was an Act of the Parliament of England. It required that certain types of contracts, wills, and grants, and assignment or surrender of leases or interest in real property must be in writing and sign ...
References
Contract law
{{law-term-stub