An implied contract exists when there is no written contract between the parties, but the courts determine that a contract exists based on the conduct of the parties or on the surrounding circumstances. In most cases, it is always best if an agreement is finalized in writing to help prove the existence of a contract. However, if the court finds that there is an implied contract, it can create various duties for the parties involved. Thus, implied contract laws allow for the existence of certain contracts even if there is no formal written agreement between the parties.
There are two main types of implied contracts: an implied-in-fact contract and an implied-at-law contract. An implied in-fact contract is where the court determines that a contract exists based on the conduct of the parties. For instance, suppose that your neighbor hires you to walk their dog once a week for a month. If you had walked their dog for three weeks, then on the last week you go to walk the dog and the neighbor refuses to pay you, the courts might find an implied-at-law contract. This may be based on the fact that you performed some of the contract duties for the previous week.
An implied-in-law contract is where the courts prescribe a contract because one party might be unjustly enriched otherwise. For instance, suppose someone’s car fell into a ditch, and a tow-truck passing by used their truck to help retrieve the car. If the tow truck driver later bills the other person, the courts might find an implied-in-law contract, even if the person did not intend to enter into a contract at first. This is because the car driver might be unjustly enriched by receiving services for free at the expense of the tow truck driver if no express contract is found.
When determining whether an implied in fact or implied in law contract exists, courts may consider several factors, including:
- The nature of the relationship between the parties
- How long the parties have known each other
- Whether the parties have entered into similar agreements before
- Whether the parties have performed any duties under an agreement
- The conduct of the parties
- Industry customs, habits, and trade practices
- Market values and standards in the area
For lawsuits involving implied contracts, courts may require that the parties take certain actions, such as paying damages, performing contract duties, or other remedies.
Implied contract cases can often involve some very complex and technical legal issues. You may need to hire a contract lawyer if you need any help with an implied contract. Your attorney can help review your case to determine what your legal options are for your claim. Also, if you need to present your case in court, your attorney can provide you with legal guidance, direction, and representation during the court processes.