A contract known by conduct of parties.a)Implied contractb)Express contractc)Unilateral contractd)Tacit contractCorrect answer is option 'D'. Can you explain this answer?

Question

Answer

Tacit contracts are those that are inferred through the conduct of parties.

Tacit contract is as such not defined in clear terms either in Indian Contract Act, 1872 or Code of Civil Procedure, 1908.

A tacit term is a term that exists without having to expressly state so, and can be surmised through one’s conduct or behaviour for example. Various case law instructs that this is a ‘term implied by the facts’ and can is used to determine the parties intention to the contract.

So essentially tacit contracts would also be implied contracts. The subtlety in the offer or the acceptance would make it a tacit contract.

Example of tacit contract: When the customer of a bank withdraws cash from ATM kiosk of a bank, it would be an example of tacit contract between the customer and the bank.

Answer

Tacit contract means implied contract in english law. so tacit and implied are same in some sense but here we have to give importance to Indian law, so implied contract is the correct answer

Answer

Explanation:

A contract known by conduct of parties is referred to as a tacit contract. It is a type of contract that is not explicitly stated or written down but is implied by the actions and behavior of the parties involved. In other words, the agreement is inferred based on the conduct and interactions of the parties rather than being explicitly expressed in a written or oral form.

Characteristics of a Tacit Contract:

1. Implied Agreement: The existence of a tacit contract is inferred from the conduct and behavior of the parties involved. It is not explicitly stated or written down.

2. Mutual Intent: Both parties involved in the contract must have a mutual understanding and intent to enter into a contractual relationship. This intent can be demonstrated through their actions and conduct.

3. Consistency: The conduct of the parties must be consistent with the terms and conditions of the contract. Their actions should reflect an agreement or understanding between them.

4. Meeting of Minds: Although a tacit contract may not be explicitly stated, there must be a meeting of minds between the parties regarding the essential terms and conditions of the agreement.

5. Enforceability: Just like any other contract, a tacit contract is legally enforceable. If one party breaches the implied terms of the contract, the other party can seek remedies in a court of law.

Examples of Tacit Contracts:

1. Buying Goods from a Store: When a person enters a store, selects goods, and proceeds to the cashier to pay, it is implied that they are entering into a contract to purchase those goods at the displayed price.

2. Hiring a Taxi: When a person hails a taxi and gets in, it is implied that they will pay the fare for the transportation service provided by the taxi driver.

3. Ordering Food at a Restaurant: When a person sits down at a restaurant, looks at the menu, and places an order with the waiter, it is implied that they will pay for the food and services provided by the restaurant.

4. Taking a Bus or Train: When a person boards a bus or train and pays the fare, it is implied that they are entering into a contract for transportation services.

Conclusion:

A tacit contract is a contract that is implied by the conduct and actions of the parties involved. It is not explicitly stated but is inferred from their behavior, intent, and consistency with the terms of the agreement. Tacit contracts are legally enforceable and can be found in various everyday situations where there is an implied agreement between parties.

Similar CA Foundation Doubts

In the formation of the contracts one thing is done by words and other replied in action,what is it express or implied contract?

___________ are the contracts implied by law

Needed a Video for consideration suit by a third party to contracrt? Related: Contingent & Quasi Contract - The Indian Contract Act, 1872, Mercantile Law?

And implied contact is a type of contract that is not expliciitly Expressred n words. is that statement is right? answer only in yes or no please do not give any explanation about it.?

is this possible that both parties may be called as promiser in a valid contract? Related: ICAI Notes- Unit 1: Nature of Contracts- 4?

Top Courses for CA FoundationView all

Quantitative Aptitude for CA Foundation

Accounting for CA Foundation

Business Laws for CA Foundation

Business Economics for CA Foundation

Mock Tests & Past Year Papers for CA Foundation

Top Courses for CA Foundation

Top Courses for CA Foundation

Related Content

CA Foundation Courses

Other Courses

How To Prepare?

Other Exams

Company