Definition
A contract whose terms are not expressly stated in words but are inferred from the conduct, acts, or circumstances of the parties — as distinguished from an express contract where terms are openly declared.
An implied contract arises when the conduct of the parties demonstrates mutual assent to be bound, even though no formal written or spoken agreement exists. Under the Indian Contract Act, 1872, acceptance need not be in words — it can be by conduct (Section 8). Implied contracts arise in two sub-forms: (a) implied-in-fact contracts — where the terms are inferred from the parties' conduct and surrounding circumstances (e.g., a customer sitting in a restaurant and eating implies agreement to pay); and (b) implied-in-law contracts (quasi-contracts) — obligations imposed by law even without any agreement, to prevent unjust enrichment (Sections 68-72 ICA).
Statutory Definition
Section 8, Indian Contract Act, 1872: 'Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal.' Section 9: 'In so far as a proposal or acceptance of any promise is made in words, the promise is said to be express. In so far as such proposal or acceptance is made otherwise than in words, it is said to be implied.'
Etymology & Origin
From Latin 'implicitus' (entangled, involved) from 'implicare' (to entangle, to fold in). An 'implied' term is one folded into the relationship of parties by inference from their conduct — not openly stated but necessarily present.
Full Legal Analysis
Implied Contract: The Agreement That Goes Without Saying
Not all contracts are written. Many agreements are made daily without a word being spoken — the passenger who boards a bus, the diner who orders a meal, the worker who performs services at another’s request without fixing a price. These are implied contracts: agreements inferred from conduct. The law recognises them because the parties’ conduct demonstrates clear mutual intent to be bound, even without verbal or written declaration.
Implied-in-Fact Contracts
An implied-in-fact contract arises from the parties' conduct rather than their words. Elements: (a) offer — one party acts in a way that reasonably invites acceptance; (b) acceptance by conduct — the other party performs the requested act; (c) consideration — each party receives something of value. Examples in Indian law: a client regularly consulting a lawyer without a written agreement creates an implied contract for the lawyer's fees; an employee performing services without a written contract has an implied contract for reasonable compensation; a builder beginning work at the owner's request (without formal contract) has an implied contract for payment at market rates.
Quasi-Contracts: Implied-in-Law (Sections 68-72 ICA)
Quasi-contracts are obligations imposed by law regardless of any agreement — they are called 'implied-in-law' contracts though they are not really contracts at all. They arise to prevent unjust enrichment. ICA provides: (a) Section 68: Claim for necessaries supplied to persons incapable of contracting; (b) Section 69: Reimbursement for payments made on another's behalf to protect their interest; (c) Section 70: Obligation to pay for non-gratuitous act — if one person enjoys benefit of another's act lawfully done (without gift intention), they must compensate; (d) Section 71: Liability for finder of goods; (e) Section 72: Money paid by mistake or under coercion must be returned.
Basis of Implied Terms in Employment
Employment law extensively uses implied terms. Courts imply into employment contracts duties that the parties did not expressly agree to: (a) duty of fidelity — employee must not compete with employer during employment; (b) duty of care — employer must provide a safe system of work; (c) mutual trust and confidence — neither party should act to destroy the employment relationship. These implied terms often determine disputes where the express contract is silent.
“A contract need not be written to be enforceable. When parties act as if they have agreed, the law treats them as having agreed. Conduct speaks louder than words — and sometimes more clearly.”
This Term in Indian Statutes
Indian Contract Act, 1872, 1872
"In so far as a proposal or acceptance of any promise is made in words, the promise is said to be express. In so far as such proposal or acceptance is made otherwise than in words, it is said to be implied."
Statutory recognition of implied contracts — proposal or acceptance by conduct rather than words
Indian Contract Act, 1872, 1872
"Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered."
Quasi-contract (Section 70): obligation to compensate for non-gratuitous benefit — prevents unjust enrichment
