Agreement Implied in Fact vs. Implied in Law - What is the Difference? | Attorney Aaron Hall
Minneapolis Business Attorney Aaron Hall, Minnesota

Agreement Implied in Fact vs. Implied in Law – What is the Difference?

What is the difference between an agreement implied in fact and an agreement implied in law?

  • A contract implied in fact is where there is no express contract, but the conduct of the parties makes it clear they both understood they had a deal.
  • A contract implied in law is where there is no contract per se, but at least one party still had a legal duty to perform.

The United States Supreme Court explained:

An agreement implied in fact is “founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding.” Baltimore & Ohio R. Co. v. United States, 261 U.S. 592, 597, 43 S.Ct. 425, 426–427, 67 L.Ed. 816 (1923). See also Russell v. United States, 182 U.S. 516, 530, 21 S.Ct. 899, 904, 45 L.Ed. 1210 (1901) ( “[T]o give the Court of Claims jurisdiction the demand sued on must be founded on a convention between the parties—‘a coming together of minds’ ”). By contrast, an agreement implied in law is a “fiction of law” where “a promise is imputed to perform a legal duty, as to repay money obtained by fraud or duress.” Baltimore & Ohio R. Co., supra, at 597, 43 S.Ct., at 426.

Hercules Inc. v. United States, 516 U.S. 417, 424 (1996).

Both are equitable remedies, which means they are available in the interests of justice, as decided by a court.

In law, “agreement” and “contract” are the same. In other words, these terms are used interchangeably. Thus, agreement implied in fact is the same as a contract implied in fact, and an agreement implied in law is the same as a contract implied in law.

Related legal concepts include quantum meruit, quantum valebant, unjust enrichment, promissory estoppel, contract implied in fact, and contract implied in law (quasi contract).

This article was written by attorney Aaron Hall.