Also known as: implied-in-law · implied in law · quasi-contract
Written by attorneys · grounded in primary & secondary sources — see below
A term or obligation supplied by operation of law rather than arising from the parties' agreement or conduct. Courts impose the term to fill an essential gap or create liability when the parties have omitted a key element from their arrangement.
Ike Ingram abruptly ended his engagement to Iris Irons after months of wedding preparations. Iris had spent several thousand dollars on deposits and invitations in reliance on the planned marriage. She sued Ike for those actual expenditures and for emotional distress caused by the cancellation. The court permitted recovery of the out-of-pocket losses under a quasi-contract theory supplied by law even though no valid marriage contract existed.
XAE Corp. assigned an overriding royalty interest in an oil and gas lease to SMR Property Management Co. The assignment contained no express language requiring XAE to develop the property or protect the royalty. SMR later claimed that XAE had failed to drill additional wells and thereby diminished the royalty value. The court recognized an implied covenant arising by operation of law from the assignment itself and allowed SMR to enforce that duty.
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A term implied at law is supplied by the court to achieve fairness or fill a gap even though the parties never manifested that intent. A term implied in fact is inferred from the parties' actual words or conduct as part of their agreement.
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A court supplies a constructive condition when the parties have omitted an essential term and performance by one party logically depends on an act by the other. The supplied term prevents forfeiture and promotes the reasonable expectations of the parties.
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Yes. Authority implied at law can bind a person who is not an agent at all, such as a spouse's power to purchase necessaries for the other spouse.
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Yes. Courts treat terms implied at law with greater flexibility than express conditions created by the parties. They may adjust or excuse the term to avoid injustice rather than applying it strictly.
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