What is an implied contract?

An implied contract is established when the circumstances, actions, or conduct of the parties involved indicate that they have reached an agreement, even if they have not explicitly stated it in writing or verbally. This often occurs in situations where the parties assume that a mutual understanding exists due to their behavior. For example, when a person enters a taxi and gives directions to the driver, it's understood that the passenger will pay for the ride, demonstrating an implied contract based on the actions taken by both parties.

This type of contract does not require a formal written document or a verbal agreement, distinguishing it from other forms of contracts, which may rely on explicit terms and conditions. Implied contracts are legally enforceable as long as the existence of the contract can be inferred from the interactions and behavior of the involved parties.