What defines an implied contract?

Study for the Arizona Salesperson Test with flashcards and multiple-choice questions. Each question is paired with helpful hints and detailed explanations. Get ready to ace your exam!

An implied contract is defined by the way it is formed rather than through explicit written or spoken terms. Specifically, it arises from the actions or behaviors of the parties involved, indicating that they intend to enter into a contractual agreement. This can occur in situations where one party provides a service or product, and the other party accepts it, demonstrating an agreement through their conduct rather than formal communication.

For instance, if you go to a restaurant, sit down, order food, and eat, you have entered into an implied contract to pay for the meal despite there being no written or overt agreement in place. The mutual understanding is established through the actions of both parties. Understanding this concept is crucial for recognizing that not all contracts need to be formally documented; some are derived from the context and behavior in a relationship.

In contrast, written agreements are explicit contracts that detail the terms clearly, while mutual promises characterize bilateral contracts where each party explicitly agrees to fulfill specific obligations. The notion of a contract failing in court relates to enforceability, which does not define the nature of an implied contract itself. Thus, the defining characteristic of an implied contract is its formation through actions rather than explicit agreements.

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