Contracts occupy an area of law that seems fairly straightforward on its face, but the further one digs, the more nuance can be found. While contracts are often agreed to in writing, the law only requires a few specific types of agreements to be reduced to writing. In fact, the vast majority of contracts do not require a writing at all. Many legally enforceable agreements are made verbally, and still others can be made with no communication between the parties at all.
An implied contract is a legal obligation created by words, actions, or circumstances. These contracts exist all around us, sometimes without us being aware that we’re even involved in a contract. For example, when you order food at a restaurant you agree that you will make a payment in exchange for the food you ordered. It’s unlikely that you made any verbal or written agreement with the waiter, but you aren’t allowed to just walk out on your bill because you’ve entered an implied contract.
The law defines two types of implied contracts: Implied-in-Law Contracts, and Implied-in-Fact Contracts. Implied-in-Fact Contracts are contracts formed when two parties conduct themselves as if an agreement is in place. The scenario of entering a restaurant and ordering food is an example of an Implied-in-Fact Contract. This is the most common type of implied contract.
Implied-in-Law Contracts are obligations created by law for the sake of justice or to avoid unjust enrichment. These contracts operate for the purposes of remedy only, and are not subject to the general rules of contracts. For example: you own a home and one day a construction crew shows up and begins repairing your driveway. You never requested that your driveway be repaired, but you are aware of the work going on and let the construction crew continue to do its repairs without objecting. In fact, the crew was supposed to repair the neighbor’s driveway instead of yours. When the work is done, the crew requests payment for the work done but you refuse to pay. The court might then rule that fairness requires that you pay for the work since you were aware of the repairs, did not object, and would otherwise be unjustly enriched by the value of the repairs.
When you believe an implied contract has been breached, you can seek to recover the payment you are owed by using the same methods you would use if you had a written contract. You can use a mediator, participate in binding arbitration, or file a lawsuit.
When you have a written contract, it spells out the responsibilities of each party to fulfill the agreement. With an implied-in-fact contract, you’ll have to establish the terms that both parties apparently agreed to, as evidenced by their behavior. And with an implied-in-law contract, you’ll need to show how one side stands to be unjustly enriched by the other’s labors or delivery of goods