What Are Implied Contracts And How Do They Work? (2026)

What Is an Implied Contract and How Does It Work?

When two people create a written or spoken agreement, they’ve executed an express contract. However, there are some situations where the actions of two parties show that they intend to enter into a contract. This is called an “implied contract,” and like an express contract, it’s legally enforceable.

These parties must adhere to the terms of their agreement, even if it was only formed due to their actions. If the other party fails to live up to their side of the bargain, the non-breaching party can file a lawsuit.

In this lawsuit, the non-breaching party can ask for compensation for the losses caused by the breach. They can also seek something called “specific performance,” which would compel the breaching party to carry out the deal as agreed.

Implied-in-Fact vs. Implied-in-Law Contracts

Two common types of implied contracts are implied-in-fact and implied-in-law contracts. With an implied-in-fact contract, a contract is established by the behavior of two parties. For example, when you order at a restaurant, you imply that you’ll pay for it.

An implied-in-law contract arises when neither party intended to enter into a contract, but it would be unfair if one party didn’t compensate the other. For example, if someone takes you to the hospital in an emergency, an implied-in-law contract requires you to pay for your care.

Get Access to All 66 ConsumerShield Legal Templates

Key Elements Required to Establish an Implied Contract

To establish an implied-in-fact contract, these four elements must be present:

• A clear offer
• A clear acceptance
• Mutual intent to enter into the contract
• Mutual exchange of obligations or promises

Since the terms of an implied-in-fact contract are not spoken or written, these elements must be inferred from the parties’ actions.

For example, suppose a homeowner hires a gardener to mow their lawn during the summer. The gardener might shovel the homeowner’s driveway after a snowstorm, and the customer might pay the gardener’s usual rate of $30 per hour. In this situation, the parties likely have an implied at-will employment contract for snow removal for $30 per hour.

Implied-in-law contracts are different because the parties don’t intentionally enter into them. Instead, a court creates the contract as a legal remedy to make sure one party isn’t unjustly enriched at the expense of the other.

This is an important point. To have an implied-at-law contract, there must be no explicit or implied promise. If either party can point to a specific promise, the court cannot create an implied-in-law contract.

Instead, the court must use the doctrines of implied-in-fact contract or promissory estoppel to determine the parties’ rights and obligations. Promissory estoppel applies when someone makes a promise and can reasonably foresee the other party relying on that promise.

Real-World Examples and Common Use Cases

The concept of implied contracts is an integral part of consumer law and business law. Here are some common examples of implied contracts:

• A freelancer who regularly works for a client could reasonably expect to be paid for work based on payments for prior tasks.
• If you hail a taxi and sit down, you’re implying that you’ll pay the fare.
• If you receive emergency medical care you didn’t ask for, you’re legally obligated to pay for it.
• If you buy a brand-new appliance, you can reasonably expect it to function.

Many implied contracts are common-sense scenarios, but not all of them are.

In addition to contracts implied by the circumstances, statutory laws also impose certain implied contract terms. For instance, most states automatically include an implied warranty of merchantability with all new consumer products.

You can use this warranty to seek repair or replacement of a product that was incapable of performing its intended purpose. This right exists even if the seller or manufacturer provided no express warranties.

How to Prove and Enforce an Implied Contract

Proving and enforcing implied contracts can be challenging. If there was an implied agreement between parties, you should gather evidence of any communication that established that agreement. Proof of past dealings or exchanges can help your case, too.

When in doubt, it’s a good idea to consult a lawyer experienced in contract law. They can help you decide what kind of evidence you’ll need to present.

Looking for Legal Help?

Understanding contract law can help you safeguard your rights in implied and express contracts. ConsumerShield is committed to connecting people like you with legal education. Explore our available forms and resources today.