contract implied in law

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A contract implied in law, also known as a quasi-contract or a constructive contract, is an obligation created by law for the sake of justice or to avoid unjust enrichment. A contract implied in law operates as a valid contract for purposes of remedy only; the general rules of contract do not apply to contracts implied in law. 

Notably, a court cannot find a contract implied in law if there already exists a contract, either express or implied, covering the same subject matter. 

As established in Bailey v. West, a constructive contract may occur if:

  • There exists a benefit conferred upon defendant by plaintiff,
  • Appreciation by defendant of such benefit,
  • Acceptance and retention by defendant of such benefit under such circumstances that it would be inequitable to retain the benefit without payment of the value thereof. 

In contrast to a contract implied in law is a contract implied in fact, where the parties do intend to create a contract through non-written or non-verbal means. 

[Last updated in July of 2022 by the Wex Definitions Team]