Contracts/Implication-in-fact

An implied-in-fact contract (also, "contract implied-in-fact" or simply, "implied contract") refers to a contract that exists by virtue of non-verbal conduct, rather than by explicit words. An implied contract has the same legal force as an express contract, though it may be more difficult to prove the existence and terms of an implied contract should a dispute arise. Generally an implied-in-fact contract is formed when one accepts something of value knowing that the other party expects compensation. For example, by going to a doctor for a physical, a patient agrees that he will pay a fair price for the service. If he refuses to pay after being examined, he has breached a contract implied in fact.

For example, when you purchase a sandwich the contractual terms are simple enough to negate the need for an explicit agreement. Many businesses are based on implicit contracts not covered by law, but by mutual interest of the parties. Another example of this is variable rates of interest on mortgages: there is no formal agreement by the building society not to raise rates substantially, however rates are not raised normally as it is in their interest to maintain competitive interest rates. Template:Law-stub