Certified Residential Appraiser Practice Exam

Which of the following best describes an implied contract?

1. A contract explicitly defined in writing

2. A contract inferred from the conduct of the parties

3. A contract that is generally unenforceable

4. A contract requiring oral confirmation only

The correct answer is: A contract inferred from the conduct of the parties

An implied contract is best described as a contract that is inferred from the conduct of the parties involved rather than explicitly stated or written down. This type of contract arises when the actions, behaviors, or circumstances of the parties indicate that an agreement exists, even without formalizing it in writing or verbally. For example, if you go to a restaurant, you sit down, and you order food, there is an implicit understanding that you will pay for the meal, creating an implied contract. The expectation is based on the standard practices of dining out and the behaviors exhibited by both the diner and the restaurant staff. An explicitly defined written contract does not qualify as an implied contract because it clearly outlines the terms and agreement in written form. Additionally, the notion of unenforceability typically pertains to contracts that lack the necessary legal requirements rather than any implied agreement. Lastly, a contract requiring only oral confirmation suggests a verbal agreement which, while enforceable in some cases, does not encompass the broader scope of an implied contract characterized primarily by inferred actions.