What is an Implied Contract?

Implied contracts are a confusing area of at-will employment which can be easily misunderstood, but can also frequently benefit an employee in employee/employer relations. There are two types of implied contracts, implied in-fact and implied in-law.

If a contract is implied in-fact, that means that the obligation is created between these parties due to the facts of the situation. If the parties’ conduct suggests an understanding, the law may find an implied in-fact contract. An example of this would be an individual being paid to mow a neighbor’s lawn several weeks in a row, only for the “employer” to refuse payment the fourth week. The law would find that an implied contract existed between the two.

An implied in-law contract is a situation in which the law imposes a duty to fulfill an unwritten contract. This can apply even if it is against an individual’s will. For example, if a doctor saves a bystander’s life, they are justified in billing the individual for their services.