Implied-in-fact contract



An implied-in-fact contract is a form of an implied
contract A contract is a legally enforceable agreement between two or more Party (law), parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, Service (economics), ser ...
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 ...
has defined "an agreement 'implied in fact'" as "founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, 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 law, 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 Mis ...
.) In such a case, the court will probably find that (as a matter of fact) the parties had an implied contract. If the patient refuses to pay after being examined, they will have breached the implied contract. Another example of an implied contract is the payment method known as a letter of credit. Generally, an implied contract has the same legal force as an express contract. 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 contracts 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 * Statute of frauds


Contract law {{law-term-stub