31. 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):
Answer: C
Implied contract
An agreement between parties that is demonstrated through their actions and conduct, rather than being formally documented, is known as an implied contract. This type of contract arises from the circumstances and behavior of the parties involved.
A) Competent contract
A competent contract refers to a contract that is formed between parties who have the legal capacity to enter into a contract. This option does not apply because it does not address the nature of the agreement being based on actions rather than documentation.
B) Invalid contract
An invalid contract is one that cannot be enforced by law due to a lack of essential elements required for a valid contract. This choice is incorrect because it does not describe an agreement formed through conduct; instead, it indicates a contract that lacks legal efficacy.
C) Implied contract
An implied contract is correctly identified as an agreement established by the actions and conduct of the parties, even without a written or spoken contract. This accurately reflects the scenario described in the question, wherein the parties' behaviors create binding obligations.
D) Incomplete contract
An incomplete contract typically refers to a contract that lacks certain terms or details necessary for it to be fully enforceable. This option does not relate to the concept of an agreement formed through conduct and is therefore incorrect in this context.
Conclusion
The correct answer is "implied contract" as it precisely describes an agreement made through the behavior of the parties involved. Other options, such as competent, invalid, and incomplete contracts, do not capture the essence of an agreement based solely on actions rather than formal documentation, thus making them unsuitable choices.