When there is an agreement between parties that is evidenced by their actions and conduct rather than a written document, it is called a(n):

Rationale

When there is an agreement between parties that is evidenced by their actions and conduct rather than a written document, it is called an implied contract.

An implied contract is formed through the behavior and actions of the parties involved, demonstrating an agreement without the need for explicit written terms. This type of contract is based on the assumption that the parties intend to be bound by their conduct, even if no formal document exists.

A (competent contract) YOUR ANSWER

A competent contract refers to an agreement made by parties who have the legal capacity to enter into a contract, such as being of legal age and sound mind. This choice does not address the nature of the agreement being based on actions rather than a written document; therefore, it does not fit the definition provided in the question.

B (invalid contract) YOUR ANSWER

An invalid contract is one that cannot be enforced by law due to various reasons such as lack of capacity, illegality, or absence of essential elements of a contract. This option does not align with the idea of an agreement reached through actions, as it denotes a lack of enforceability rather than an implied understanding based on conduct.

C (implied contract) CORRECT

An implied contract arises from the actions and conduct of the parties involved, indicating a mutual intention to form a contract without a formal, written agreement. This option perfectly aligns with the description in the question and captures the essence of agreements formed through behavior rather than explicit documentation.

D (incomplete contract) YOUR ANSWER

An incomplete contract refers to an agreement that lacks essential terms or details needed for enforcement. While it may suggest a lack of clarity or certainty, it does not describe an agreement based on actions and conduct, which is the central theme of the question.

Conclusion

An implied contract is characterized by the parties' actions and conduct indicating an agreement, even in the absence of a formal written document. The other options either describe different types of contracts or do not pertain to the nature of agreements formed through implied understanding. Understanding these distinctions is crucial in contract law, as they help clarify how agreements can be established and enforced.

When there is an agreement between parties that is evidenced by their actions and conduct rather than a written document, it is called a(n):

When there is an agreement between parties that is evidenced by their actions and conduct rather than a written document, it is called an implied contract.

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