Implied-In-Fact Contract
An Implied-In-Fact Contract is an implied contract is a formed through the conduct and actions of the parties, demonstrating or indicating mutual intent to be bound by a contract.
- AKA: Implied-In-Fact Agreement.
- Context:
- It can require a "meeting of minds", where both parties understand and agree to the terms without explicit verbal or written agreement.
- It can be legally enforceable, in the same manner as express contracts, though proving their existence may require demonstrating the circumstances and conduct that imply the agreement.
- It can be more challenging to prove in court compared to express contracts due to the lack of explicit documentation.
- It can be based on previous agreements or established patterns of behavior between parties.
- It can include elements such as an unambiguous offer, unambiguous acceptance, mutual intent to be bound, and consideration.
- It can be recognized in various industries, including service, employment, and business partnerships.
- It can be limited in some jurisdictions, particularly for real estate transactions that may require written agreements.
- It can be distinguished from implied-in-law contracts (quasi-contracts), which are not based on the parties' conduct but are imposed by law to prevent unjust enrichment.
- ...
- Example(s):
- Restaurant dining, where ordering and consuming a meal implies an agreement to pay for it.
- Taxi service, where entering a taxi and stating a destination implies an agreement to pay the fare.
- Freelance work, where regular work for a client without a formal contract implies an agreement for payment based on previous interactions.
- ...
- Counter-Example(s):
- Express contract, which explicitly states terms and conditions in written or verbal form.
- Implied-in-law contract, which is imposed by law to prevent unjust enrichment, rather than arising from parties' conduct.
- See: Quantum Meruit, Legally Binding Agreement, Verbal Agreement, Quantum Meruit, Unilateral Contract, Contractual Remedy, Contractual Consideration, Question of Fact, Breach of Contract.
References
2024a
- (ChatGPT-OpenAI, 2024) ⇒ Prompt: Summarize the concept Implied-In-Fact Contract in 1- 2 paragraphs. ChatGPT (model:gpt-4o). Retrieved: 2024-12-29.
- QUOTE: An implied-in-fact contract is a type of agreement formed through the conduct of the parties involved, rather than through explicit written or spoken words. This form of contract arises when the behavior or circumstances of the parties suggest that they have a mutual understanding or intent to enter into an agreement. Typically, an implied-in-fact contract is recognized when the actions of one party lead the other to reasonably believe that a contract exists, and both parties perform their respective obligations based on this belief. For instance, if a customer walks into a barbershop, sits in the chair, and receives a haircut, an implied-in-fact contract is created for payment in exchange for the service.
The establishment of an implied-in-fact contract relies on several elements, similar to those required for express contracts: offer, acceptance, and consideration. However, these elements are derived from the circumstances and interactions between the parties. Courts often look at the conduct of the parties, the context of their relationship, customary business practices, and any pertinent verbal or written exchanges to ascertain the existence of such a contract. Implied-in-fact contracts are legally enforceable and serve to ensure that parties fulfill their respective duties or expectations, even in the absence of a formalized agreement.
- QUOTE: An implied-in-fact contract is a type of agreement formed through the conduct of the parties involved, rather than through explicit written or spoken words. This form of contract arises when the behavior or circumstances of the parties suggest that they have a mutual understanding or intent to enter into an agreement. Typically, an implied-in-fact contract is recognized when the actions of one party lead the other to reasonably believe that a contract exists, and both parties perform their respective obligations based on this belief. For instance, if a customer walks into a barbershop, sits in the chair, and receives a haircut, an implied-in-fact contract is created for payment in exchange for the service.
2024b
- (Wikipedia, 2024) ⇒ https://en.wikipedia.org/wiki/Implied-in-fact_contract Retrieved:2024-12-29.
- An implied-in-fact contract is a form of an implied contract formed by non-verbal conduct, rather than by explicit words. The United States Supreme Court 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.) 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 jurisdictions, contracts involving real estate 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.
- An implied-in-fact contract is a form of an implied contract formed by non-verbal conduct, rather than by explicit words. The United States Supreme Court 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."
2024c
- (Perplexity AI, 2024) ⇒ Perplexity AI (2024). "Prompt: Specify the relationship between the "Implied-In-Fact Contract" and "Quantum Meruit"". Retrieved: 2024-12-29.
- QUOTE: An Implied-In-Fact Contract and Quantum Meruit are related legal concepts, but they are distinct. While an Implied-In-Fact Contract is inferred from the conduct of parties and requires mutual agreement, Quantum Meruit is a legal remedy that allows recovery for the reasonable value of services provided when there is no express agreement on payment. Quantum Meruit is often used in situations where an Implied-In-Fact Contract cannot be established, but it would be unjust for one party to benefit from services without compensation. In essence, Quantum Meruit can serve as a fallback option when an Implied-In-Fact Contract cannot be proven, ensuring fair compensation for services rendered.
2024d
- (ChatGPT-OpenAI, 2024) ⇒ GMRKB ChatGPT AI Assistant (2024). GMRKB (2024-04-08) Prompt: "Specify the relationship between tthe Implied-In-Fact Contract and Quantum Meruit"]. Retrieved: 2024-12-29.
- QUOTE: An implied-in-fact contract is established through the conduct of the parties, indicating a mutual agreement without explicit terms. In situations where one party has provided services or benefits to another under such an implied agreement, but compensation was not specified, the doctrine of quantum meruit allows the performing party to recover the reasonable value of the services rendered. Quantum meruit ensures that individuals are fairly compensated for benefits conferred, preventing unjust enrichment, especially in the absence of a formal contract.
2024e
- (PandaDoc, 2024) ⇒ PandaDoc. (2024). "Implied Contracts Guide: Definition, Types with Examples". In: PandaDoc Blog.
2022
- (Wex Definitions Team, 2022) ⇒ Wex Definitions Team. (2022). "Contract Implied in Fact". In: Legal Information Institute, Cornell Law School.
2020
- (Corporate Finance Institute, 2020) ⇒ Corporate Finance Institute. (2020). "Implied Contract - Definition, Examples, Characteristic". In: Corporate Finance Institute.