Which term describes an agreement that is not verbally communicated but understood through actions?

Prepare for the Edmentum Personal Finance Exam with flashcards and multiple-choice questions. Gain insights with explanations and hints for each question. Get ready for your test!

The term that describes an agreement that is not verbally communicated but understood through actions is an implied contract. An implied contract arises when the actions of the parties involved suggest that they have an agreement, even if no explicit words or written documentation have been exchanged to formalize the terms. This type of contract is often based on social norms or customary practices, allowing parties to understand their obligations through their behavior and the context of their interactions.

For instance, when someone orders food at a restaurant, there is an implied contract between the customer and the restaurant that the customer will pay for the meal after consumption, even though there is no formal agreement signed at the table. This understanding is derived from the common practices of dining out, illustrating how implied contracts operate in various scenarios without the need for spoken or written terms.

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