What is meant by an "implied contract"?

An implied contract refers to a situation where an agreement is not explicitly stated in words or writing, but is instead established through the actions, behaviors, or circumstances of the involved parties. In legal terms, it signifies that even in the absence of a formal discussion or documentation, a mutual intention to enter into a contract is inferred.

For instance, if a person goes to a restaurant, orders food, and consumes it, an implied contract is formed whereby the customer agrees to pay for the meal provided by the restaurant, despite no spoken agreement existing. The key aspect of implied contracts is that the conduct or circumstances indicate that an agreement exists, fulfilling the criteria for contract formation, even if it's not formally articulated.

This concept contrasts with other types of agreements, such as verbal agreements, which explicitly state the terms but still rely on speech rather than actions for their formation. Similarly, an automatically renewed contract and a formal contract established by court decision have different characteristics and legal implications, not falling under the definition of an implied contract. Thus, the emphasis on actions and circumstances as the basis for the formation of an implied contract makes it the correct choice in this context.