Implied Agreement: Everything You Need to Know
An implied agreement is an obligation between two or more parties in the absence of a written contract.3 min read
2. Implied-in-Law Contracts
3. Oral Contracts
An implied agreement is an obligation between two or more parties in the absence of a written contract, based on the interest of fairness implied by circumstance or conduct. In some cases, an implied warranty agreement is provided by law, such as the guarantee you receive that a new product you purchase will work as expected. In others, contracts are implied by fact because both parties assumed that an agreement existed and acted as such. Although it's beneficial to document an agreement with a written contract, implied agreements may also be legally binding.
One example of an implied-in-fact contract is when you take your pet to the veterinarian. The doctor's actions in establishing a practice imply that he or she will provide the best possible medical treatment of the animal in exchange for a fee. This contract is breached if he or she fails to do so or if you do not pay for the services rendered.
In another example, a neighborhood boy shovels an older man's walk each time it snows, and each time the man gives him $10. After this has occurred four or five times, the man stops paying. If the boy were to bring a case to court, the judge would likely rule in his favor because both parties implied a contract by the fact of their initial actions. Courts will look at the behavior pattern of both parties to determine whether an implied-in-fact contract exists.
If you sit down in a restaurant and order a meal, you have entered an implied-in-fact contract. Your actions indicate that you are purchasing food for the price indicated on the menu and will be responsible for paying the bill. This is legally binding even though you didn't sign anything.
Although this type of contract holds up in court, both parties must assent by their actions for it to be valid. What qualifies as assent varies depending on the circumstances. For example, if you are a freelance writer and your client mentions another component they want to add to the project, it's best to get the specifics and cost in writing. Otherwise, they may not be required to pay for it if you deliver it without clear assent. On the other hand, if you fail to deliver it, you may be seen as in breach of contract if the client believes you have agreed to complete the work in question.
This type of contract is automatically established by the law imposed in a situation between two parties even if they don't intend to enter an agreement. If one party receives unjust benefits to another party's detriment, restitution must be paid for the goods, services, or other benefits in question.
Returning to the veterinarian example, let's assume you were walking your dog in the park when the animal began to choke. The vet, who happens to be nearby, performs the Heimlich maneuver and saves the dog. The vet then sends you a bill, which you are obligated to pay for services rendered under an implied-in-law contract.
When implied-in-law contracts are heard in court, the law will require an individual to uphold his or her end of the bargain even unwillingly. In the example above, you are unjustly enriched by the veterinarian's rescue of your dog and must make restitution for the services he or she provided.
A similar scenario occurred when a writer claimed that the NBC show Ghost Hunters used a script that he had submitted without paying him for the work. The courts found in his favor, noting that an implied contract exists between a writer submitting work with the expectation they would be paid for its use and the studio that uses it.
In most cases, oral contracts are treated as valid by the courts. Although specific laws vary by state, in most cases the following types of contracts must be written:
- Land or real estate sales
- Promissory notes for significant debt
- Projects that last longer than a year
- Goods costing more than a specific amount
- Sale of certain kinds of goods
However, if a dispute arises, a written contract has more weight than a spoken one. It can be difficult to capture specifics in an oral agreement.
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