Which statement about implied contracts is true?

• A. They Arise from the Conduct of the Parties.
• B. They Require a Formal Written Instrument.
• C. They Are Formed by the Explicit Written Agreement.
• D. They Are the Same as Oral Contracts.

Answer: (A)

Implied contracts are formed by the conduct of the parties, not by a formal written instrument or explicit spoken terms. When people act in a way that shows they’ve agreed to perform or exchange something, a contract can be created even without a signed document or a stated promise. For example, if you receive services and you pay for them, there’s an obligation to pay that arises from your actions and the service provider’s actions, not from a written or verbally negotiated agreement. This is what makes the statement true: the agreement is inferred from behavior and circumstances.

The other statements don’t fit because a formal written instrument isn’t required for an implied contract, and explicit written terms aren’t what create it. Also, implied contracts are different from oral contracts, which are formed by spoken promises; implied contracts rely on conduct rather than words written or spoken.