Implied contract

Implied contract

While we love contracts at Contractbook, we’re not a hardcore fan of every type of contract. An implied contract is such an example that. Though it does have its advantages, we would only ever use it if there was literally no other alternative. We would always advocate a written contract instead of an implicit one.

What is an implied contract?

Any implied contract definition needs to take into account the two types of implied contracts that occur. There is an implied in fact contract and an implied in law contract. Knowing the difference is crucial to fully understanding implied contract law. 

An implied contract is between two parties that have come to an arrangement that has transpired solely through the circumstances and activities or both parties involved. Often, that will mean that past actions have created an implicit contract about an arrangement in the future. 

An implied in law contract, in comparison, is an arrangement that occurs even though neither side of the contract ever intended for that arrangement to come about. However, that arrangement will have occurred due to the situation or circumstances that happened. An implied in law contract may sometimes be referred to as a quasi-contract too. 

How does an implied contract work?

An implied contract is best understood when looking at an implied contract example. 

An implied in fact contract could be where one party, John, starts pruning another party’s (Joan’s) roses. While not expected in the first instance, Joan pays John for his hard work. When John goes to prune Joan’s roses again, he is paid one more time. On the third time that he prunes the roses, Joan does not pay. He could, therefore, have legal standing to seek compensation for his work. 

An implied in law contract, in comparison, could be when a doctor, enjoying a meal at a restaurant, sees another customer choking. If the doctor performs the heimlich maneuver on the customer and saves their life, the doctor can actually send a bill for the service he performed. 

Advantages of an implied contract

The advantage to an implied contract - either implied in fact, or implied in law - is that you do not always have to have a contract written down to be able to glean either legal remedy or payment for an arrangement. In that way, the other advantage that implied contracts provide is the reduction in an administrative burden and effort. Without having to write a contract, none of the surrounding work with regards to a contract is required. 

Contractbook and implied contract 

While those two advantages mentioned above are quite compelling, to us, they really are not enough to better the advantages of a written contract. 

A written contract is far more easily enforceable than an implied contract. It is difficult to seek legal help when fighting a case with an implied contract as it is hard to delineate clearly who the wronged party is, and what the subsequent legal resolution should be. In short, an implied contract dispute will often descend into a he said she said fiasco which is not efficient or helpful to anyone. 

Plus, behind all of this, an implied contract also means that results are far less likely to be of the standard that either party wants. A written contract does not leave anything to chance. It simply lays out in black and white, what is required from both sides. And, ultimately, it does not have to be administratively onerous to create a contract. Using templates or software from Contractbook helps streamline, if not automate, contracts and their creation.

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