What type of contract is formed through actions rather than explicit words?

Study for the Real Estate Contract Test. Improve your knowledge with interactive flashcards and multiple-choice questions, each equipped with hints and explanations. Prepare well for your exam!

An implied contract is established through the actions, behavior, or circumstances of the parties involved rather than through explicit written or spoken words. This means that when people act in a way that indicates they have agreed to certain terms, even though they haven't formally expressed those terms, an implied contract can exist. For example, if someone goes to a restaurant and orders a meal, it is understood that they will pay for the meal after consuming it. The actions of ordering and serving create an implied agreement for payment.

In contrast, an express contract is one where the terms are clearly stated either verbally or in writing, leaving no room for interpretation regarding the agreement. Oral contracts are spoken agreements and can also be a type of express contract, but they rely on verbal communication rather than actions. Written contracts clearly document the terms and conditions, leaving less ambiguity but requiring more formalities. Therefore, while express, oral, and written contracts are important forms of agreement, the distinctive characteristic of an implied contract lies in its foundation on actions rather than explicit statements.

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