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implied-in-fact contract

Legal Definition of implied-in-fact contract

Related terms


Definition of implied-in-fact contract

Further reading

In United States law, an implied-in-fact contract (a form of implied contract) is a contract agreed by non-verbal conduct, rather than by explicit words. The United States Supreme Court defined this in its decision Baltimore & Ohio R. Co. v. United States, 261 U.S. 592 (1923).[1]. That decision described "an agreement 'implied in fact'" as "founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding."

Such contracts are formed when one party accepts something of value knowing that the other party expects compensation. For example by visiting a doctor, a patient agrees to pay a fair price for the service. If he refuses to pay after being examined, he has breached a contract implied in fact.

Generally, an implied contract has the same legal force as an express contract. However, it may be more difficult to prove the existence and terms of an implied contract should a dispute arise. In some jurisdictions, contracts involving real estate may not be created on an implied-in-fact basis.

Typically, unilateral contracts are the subject matter of these types of contracts where acceptance is being made by beginning a specified task.

Potential Factors

  • A prior history of similar agreements
  • When recipient accepts something of value knowing other party expects compensation

See also

References

  1. Implied in fact contract definition noted from US Supreme Court decision

References:

  1. Wiktionary. Published under the Creative Commons Attribution/Share-Alike License.



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