How is an implied contract formed?

An implied contract is formed by the actions or conduct of the parties involved, rather than through explicit written or verbal agreements. This type of contract arises when the circumstances or behaviors of the parties suggest that they have reached an agreement, even if no formal contract exists. For example, if you go to a restaurant and order a meal, there is an implied contract that you will pay for the meal upon receiving it, based on the conduct of ordering and serving the food.

The concept of an implied contract rests on the principle that certain actions imply a mutual understanding between the parties involved. It often is utilized in situations where establishing a formal contract might be impractical. The actions of the parties create a reasonable expectation that an agreement has been established, which courts can enforce.

In contrast, a written agreement, while clear and formal, does not account for the nuances of implied contracts, and neither do verbal discussions alone, which require more definitive communication. Lastly, the presence of a legal witness is not necessary for an implied contract because such contracts are about conduct and context rather than formal validation.