WHAT IS IMPLIED CONTRACT?

WHAT IS IMPLIED CONTRACT?

An implied contract is a contract between two legally enforceable and accurate parties, but there is no verbal or written documentation. It is based on the fact that certain things are implied to establish fairness in the workplace.

An implied contract is mutually understood to exist and hence should be respected and enforced.

As the implied contract is not written or verbally spoken, they are more difficult to enforce or reported than the expressed contract. Yet, implied contracts are legally binding.

TYPES OF IMPLIED CONTRACT:

There are two types of implied contract; Implied in-fact contract and implied in-law contract.

 Implied in-fact: An implied-in-fact contract is created by the circumstances and behaviour of the parties involved. It is an observational understanding based on the past or present conduct of both parties. It creates an obligation on both the employee and the employer based on the facts and the situations experienced.

An example of it would be – suppose you work in McDonald’s and every day you are getting one meal at the end. Now that you have observed that you have been getting the meal every day, you automatically assume this is how it happens in the workplace.

If you are not given the meal on one certain day, and the authorities refuse to give the same to you, it will be a breach of the implied contract. This is because it was an established agreement that you should be given a free meal every day. If you report it, the court would infer an unsaid agreement between the parties and accordingly order the authorities to continue the meal service.

 Implied in-law: With an implied at-law contract, the law levies a duty to perform a contract, and will enforce a contract if it is against a person’s will. The circumstances correspondingly should be such that another party’s action would unjustly benefit one party without this solution.

In this situation, one party is entitled to compensate for the services provided, even if there was never any intent by either party to enter into an agreement.

This type of agreement is considered a quasi-contract. A quasi-contract is where the law imposes an obligation upon parties were, in reality, the parties had not intended to enter into a contract or made no promise to perform the same.

An example of such a contract would be – suppose you meet with an accident where you had to be rushed into a hospital and given emergency treatment without your consent. After you are treated, you are legally bound to pay the doctor for his services even though you did not ask for the treatment.

ENFORCEABILITY OF IMPLIED CONTRACT:

All implied contracts are legally binding but are very difficult to enforce. One party can sue the other in court on the grounds of breaching an implied contract. The legality, of an oral agreement, cannot be questioned, if it falls under the ambit of the requirements stated in section 10 of the Indian Contract Act, 1872.

Author: Shweta Singh