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Implied Contract - Definition & Advantages of Implied Contract | What is Implied Contract?

An implied contract is an unspoken or unwritten agreement inferred from actions or circumstances. This post will discuss the definition, benefits, and considerations of implied contracts, and provide examples of their applications. 

What is an Implied Contract?

An implied contract is an agreement formed through the actions of the parties involved, not through written or spoken words. It could arise from behaviors, repeat dealings, or common practices in a specific context. 

Benefits of Implied Contracts:

Implied contracts have several advantages: 

  1. They allow flexible negotiations and can adapt to changing circumstances.
  2. They enforce oral or personal promises, useful in informal transactions or personal arrangements.
  3. They provide legal recourse for breaches, allowing one party to sue the other for damages.

Drawbacks of Implied Contracts:

Implied contracts also have limitations: 

  1. Proving an implied contract in court can be difficult, especially if one party denies its existence.
  2. The lack of explicitly stated terms can lead to misunderstandings and legal disputes.
  3. The absence of written documentation can result in contract breaches and enforcement difficulties.


Implied contracts are significant in business and personal relationships, providing flexibility and enforceability for oral agreements. However, they come with potential challenges, including proof difficulties and term ambiguities. Consulting a legal expert when dealing with implied contracts is recommended.