Under which circumstances can an employer and employee form an implied contract?

Under which circumstances can an employer and employee form an implied contract?

• A. When there is a formal written agreement
• B. Only during verbal discussions
• C. When work is performed and compensation is expected
• D. When an employee has an offer letter

Answer: (C)

An implied contract between an employer and an employee can be formed when the employee performs work and the employer provides compensation in return, reflecting a mutual understanding of the terms of employment. This situation indicates that both parties have accepted certain conditions through their actions rather than through a written or formal agreement. An implied contract often arises in scenarios where formal details are absent; the consistent pattern of behavior—such as regularly receiving pay for completed tasks—suggests that both the employer and the employee recognize a binding relationship exists. This understanding can encompass aspects such as expectations around job performance, duration of work, or salary, even if these specifics are not explicitly stated in a formal document. The other options do not create an implied contract in the same way. A formal written agreement clearly defines the terms and conditions of employment, leaving no room for an implied understanding. While verbal discussions and offer letters may provide context or intent, they do not alone establish the same type of mutual agreement reflected through ongoing work and accepted remuneration.

An implied contract between an employer and an employee can be formed when the employee performs work and the employer provides compensation in return, reflecting a mutual understanding of the terms of employment. This situation indicates that both parties have accepted certain conditions through their actions rather than through a written or formal agreement.

An implied contract often arises in scenarios where formal details are absent; the consistent pattern of behavior—such as regularly receiving pay for completed tasks—suggests that both the employer and the employee recognize a binding relationship exists. This understanding can encompass aspects such as expectations around job performance, duration of work, or salary, even if these specifics are not explicitly stated in a formal document.

The other options do not create an implied contract in the same way. A formal written agreement clearly defines the terms and conditions of employment, leaving no room for an implied understanding. While verbal discussions and offer letters may provide context or intent, they do not alone establish the same type of mutual agreement reflected through ongoing work and accepted remuneration.