What defines an implied contract?

An implied contract is characterized by the conduct and circumstances surrounding an agreement rather than explicit written or verbal communication. This type of contract is formed through the actions, behavior, or situations of the parties involved, indicating that they have an understanding or agreement that is not formally documented or articulated.

For example, if someone enters a taxi and assumes they will pay for their ride upon arrival at their destination, an implied contract exists based on this mutual understanding. The lack of a written or verbal agreement does not prevent the contract from being valid; instead, the implication is derived from the nature of the transaction and the actions taken by the parties.

Understanding the concept of an implied contract is crucial in real estate transactions, where not all agreements may be formally documented, yet obligations and expectations still exist based on the interactions and behaviors of the parties involved.