What term describes an understanding between parties that is not formally expressed?

An implied contract describes an understanding between parties that is not formally expressed in written or spoken terms. This type of contract is formed through the actions or conduct of the parties involved, suggesting that they have reached an agreement even without explicit communication. For instance, when a person orders food at a restaurant and eats it, there is an implied contract that they will pay for the meal, even though no formal contract was signed. This concept is crucial in real estate and other transactions where actions can indicate an agreement and the intent to enter into a binding relationship.

In contrast, bilateral contracts involve a mutual exchange of promises between parties, where both sides have obligations spelled out clearly. Unilateral contracts entail a promise made by one party where the other party's fulfillment of a condition offers acceptance. Lastly, an executed contract refers to an agreement that has been signed and finalized, with all obligations fulfilled by the parties. Understanding these distinctions highlights the unique nature of an implied contract.