Which statement best describes the implied-in-fact contract?

• A. Formed by conduct rather than explicit terms
• B. Requires writing to be valid
• C. Only applies to service contracts
• D. Cannot be enforced

Answer: (A)

Implied-in-fact contracts come from how people act, not from what they say in words. When the parties’ conduct shows they intend to be bound by an agreement, a contract is formed even without explicit promises or written terms. The agreement’s terms aren’t read from a written or spoken contract; they’re inferred from the circumstances and the actions taken, such as performing a service or delivering goods with an expectation of payment.

This kind of contract is enforceable because there’s mutual assent demonstrated by conduct, along with the usual elements of a contract like consideration. It isn’t limited to services, and you don’t need a written document for it to be valid in most situations (though some contracts do require writing under other rules).

So the statement that best describes an implied-in-fact contract is that it is formed by conduct rather than explicit terms.