Implied Contract

A contract can be defined as an agreement that is enforceable by law. In other words, it is an agreement for a stipulated consideration between two or more competent persons or legal entities to do or refrain from doing something that allowed by law. So, the basic elements of a contract are consideration, two or more parties, competency of parties and a legal purpose. A contract can be either express or implied. The terms and conditions of the contract are explicitly declared in words, either orally or in written format, at the time of making. Implied contracts lack these explicitly declared terms of the agreement, but are implied by the courts from the conduct of the parties.

What is an Implied Contract

So, there can be two types of contracts - express and implied. We all know that express contract is an agreement, wherein the terms and conditions are explicitly stated. Implied contract is one, which has to be inferred from the surrounding circumstances and conduct of the parties. You can understand this concept from the following example. You are taking your car to the repair shop for fixing some dents. While you expect the mechanic to do the work perfectly, the mechanic expects you to pay for his work. It is very rare to find a written agreement between the car owner and mechanic under such circumstances. Even though, there is no formal agreement, there exists an implied contract between the two. This type of contract is also known as implied in fact contract. Implied contract of employment is nothing other than an agreement inferred from the conduct of the employee or from the circumstances. For example, if the agreement of employment contract does not provide any specific condition for removal of the employee, it can be inferred that he has been hired for lifelong work.

There is one more type of implied contract, which is not actually considered as a contract. That is quasi contract, which is otherwise termed as implied contract in law. This is not a contract, but can be considered a remedy by the court to prevent unjust enrichment of a person, at the cost of another. This can be explained with an example. A is knocked down by a car and is found by B. B takes the unconscious A to the doctor C, who offers treatment. Once he regains his health, A may refuse to pay C, stating that there is no agreement between them. In such cases, the doctrine of quasi contract can be applied by the courts and order the person who has received unjust enrichment to pay the aggrieved person.

Breach of Implied Contract

In general, this type of contract is also legally enforceable as the express contracts, but, the only difference is that it is very difficult to prove the existence of the former. As the terms and conditions have to be inferred from the circumstances of the case and the conduct of the parties, the aggrieved party has to struggle hard to prove an implied contract. 'Breach' is a much wider term that includes a violation of law, obligation or promise. It is not restricted to the violation of promises that are explicitly stated in a contract. So, it is also enforceable by law.

This is only a brief overview about implied contract and its various aspects. The existence and breach of such contracts have to be decided by the courts.