Free Pennsylvania Real Estate Practice Exam Practice Question
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):
Correct Answer: C
Rationale: An implied contract arises when the actions and conduct of the parties involved suggest an agreement, even without a written document. This type of contract is recognized in law based on the behavior of the parties, ensuring that obligations are upheld despite the absence of formalities.
Option A, a competent contract, refers to a valid contract where parties have the legal capacity to agree, but it does not specifically address the nature of the agreement being implied.
Option B, an invalid contract, indicates that no legal agreement exists, which contradicts the premise of mutual agreement through conduct.
Option D, an incomplete contract, implies that essential terms are missing, whereas an implied contract is fully recognized based on the parties' actions.
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