3) What Is an Implied-In-Fact Contract

October 28, 2022 by admin

An implied-in-fact contract, also known as a quasi-contract, is a legal agreement between two parties that has not been explicitly stated or written down. Instead, it is created by the actions, conduct, or circumstances of the parties involved.

This type of contract is based on the principle of fairness and equity. In other words, if one party has benefited from the actions of the other party, it is only fair that they compensate them for their contribution.

For example, imagine that you hire a contractor to remodel your kitchen. You agree on a price and a timeline for the work to be completed. However, during the renovation, the contractor discovers an unforeseen issue, which requires additional work and materials. Even though you did not explicitly agree to pay for these additional expenses, it is implied that you will do so because you have benefitted from the extra work done.

Implied-in-fact contracts are legally binding and enforceable in court. However, they can be challenging to prove because they rely on circumstantial evidence rather than explicit terms and conditions.

To establish the existence of an implied-in-fact contract, four elements must be present. The first is that the parties must have had a mutual understanding that a contract existed. Second, the parties must have intended to create a contract. Third, there must have been an offer and acceptance of the contract`s terms. Finally, both parties must have exchanged something of value, such as goods or services.

In conclusion, an implied-in-fact contract is a legal agreement formed by the actions, conduct, or circumstances of the parties involved. It is based on the principle of fairness and equity and can be challenging to prove in court. Therefore, it is essential to have explicit terms and conditions in any agreement to avoid any confusion or misunderstandings.