Contracts are an essential part of any business transaction. They outline the terms and conditions of an agreement and bind both parties to fulfill their respective obligations. While many contracts are explicit and written down, some contracts are implied. Implied contracts are agreements that are not formally recorded or signed but nevertheless binding. There are two different types of implied contracts: implied in fact and implied in law.
Implied in fact contracts are formed based on conduct between the parties. In other words, the agreement is created through actions instead of words. This type of contract can arise when one party performs a service or provides goods, and the other party accepts them without any written agreement. For example, if you go to a restaurant and order food, you are entering into an implied in fact contract with the restaurant. By ordering the food, you are implying that you will pay for it, and the restaurant is implying that they will provide it.
On the other hand, implied in law contracts are created by the law itself, rather than by the conduct of the parties. These contracts are also known as quasi-contracts or constructive contracts. They are not based on the parties` intentions, but rather on fairness and equity. Implied in law contracts are created when one party receives a benefit from another party, and it would be unjust to allow the receiving party to keep the benefit without compensating the giving party. An example of an implied in law contract is when a person receives medical treatment at a hospital without consenting to it, but it is necessary to save their life. In this case, the law implies that the person should pay for the medical services they received even though they did not explicitly agree to it.
In conclusion, implied contracts are crucial in business transactions, and it is essential to understand the different types of implied contracts to protect both parties involved. Implied in fact contracts are formed based on the actions of the parties, while implied in law contracts are created by the law itself to ensure fairness and equity. Both types of contracts are binding and can result in legal obligations, so it is essential to be aware of their implications.