Implying An Agreement: New York’s Implied‑in‑Fact Contract Doctrine in Theory and Practice

By: Jeffrey M. Haber

Implied‑in‑fact contracts under New York law arise from conduct rather than explicit agreement, requiring objective evidence of mutual assent, definite terms, and an intent to be bound. They are fully enforceable but subject to important limitations, including the preclusive effect of governing express contracts. The Fourth Department’s decision in University Hill Realty, Ltd. v Akl, 2026 N.Y. Slip Op. 03561 (4th Dept. June 5, 2026), illustrates the doctrine’s fact‑intensive nature. There, the Court held that post‑contract expiration communications and continued dealings between the parties raised triable issues as to whether an implied agreement existed, underscoring that ongoing conduct may support contractual liability even after a written agreement lapses.

The Governing Rules

An implied‑in‑fact contract arises where the parties’ agreement is not expressed in words but is inferred from their conduct, demonstrating mutual assent and an intent to be bound. To be enforceable, it must include the essential elements of an express contract – offer, acceptance, consideration, mutual assent (i.e., a meeting of the minds), legal capacity, lawful subject matter, and sufficiently definite terms.[1] Assent may be implied where a party’s conduct reasonably indicates agreement, such as the acceptance of services or benefits under circumstances giving rise to an expectation of compensation. Importantly, the manifestation of assent must be clear and unambiguous. The burden rests on the party asserting the contract to establish its existence, essential terms, and mutual intent based on objective manifestations—not the parties’ unexpressed, subjective beliefs.[2]

Under New York law, express contracts and implied‑in‑fact contracts are mutually exclusive.[3] Although an implied‑in‑fact agreement is formed through conduct rather than explicit language, it is “just as binding as an express contract arising from declared intention.”[4] The existence and terms of such a contract are inferred from “the specific conduct of the parties, industry custom, and course of dealing.”[5] As the Second Circuit has explained, an implied‑in‑fact contract arises “when the agreement and promise have simply not been expressed in words,” but where “a court may justifiably infer that the promise would have been explicitly made, had attention been drawn to it.”[6] Accordingly, courts examine the totality of the parties’ conduct, their relationship, and their objectives to determine whether mutual assent exists.[7]

Implied‑in‑fact contracts are distinct from contracts implied in law (quasi‑contracts), which are not true agreements but equitable remedies imposed to prevent unjust enrichment regardless of the parties’ intent. By contrast, implied‑in‑fact contracts impose ordinary contractual obligations grounded in consensual conduct. For example, the performance and acceptance of services under circumstances indicating an expectation of payment may support the inference of such a contract. These agreements carry a duty of good‑faith performance and may be subject to equitable defenses, applied within the framework of contract law.

New York courts also recognize important limitations on implied‑in‑fact contract claims. First, the existence of a valid and enforceable express contract governing the same subject matter precludes recovery under an implied contract theory.[8] Thus, a party cannot be held liable on an implied contract theory where an express agreement covers the same subject matter.

Second, a contract will not be implied in fact where the surrounding facts are inconsistent with its existence – for example, where it would contradict the express declarations of the party to be charged, the parties’ intent or understanding, or where recognizing such a promise would be unlawful.[9] 

In University Hill Realty, Ltd. v. Akl, the Appellate Division, Fourth Department addressed the foregoing principles, holding that issues of fact precluded defendants’ motion for summary judgment dismissing plaintiff’s claim for breach of an implied contract.

University Hill Realty, Ltd. v. Akl

University Hill concerned an “Exclusive Right to Sell Agreement” regarding property in Syracuse. The contract granted plaintiff, a real estate broker, the sole and exclusive right to sell the property during a defined listing period, which ran from November 6, 2018 to May 6, 2019.

According to the complaint, plaintiff was granted, pursuant to a written listing agreement on plaintiff’s letterhead, the exclusive right to market defendants’ property from November 6, 2018 through May 6, 2019. The agreement provided for a two percent commission in two circumstances: (1) if, before May 6, 2019, defendants entered into a written contract with a purchaser introduced to the property during the listing period; or (2) if, within the ensuing twelve‑month protection period (through May 6, 2020), defendants entered into a contract with a previously disclosed prospective purchaser identified in writing by plaintiff. It was undisputed that plaintiff acted as broker during the listing period and marketed the property to multiple prospects, including Syracuse University (“SU”), with whom plaintiff’s agent communicated extensively between November 2018 and early 2019.

Those early efforts did not result in a sale. Although SU expressed preliminary interest, its initial indications, reportedly in the “high $2 million range,” were well below defendants’ expectations, and discussions ceased after plaintiff’s agent advised SU that defendants were pursuing another transaction. The listing period expired on May 6, 2019, without a sale, and the property remained unsold through the contractual protection period. Plaintiff continued to convey additional expressions of interest, including a June 2019 letter of intent from another prospective purchaser, but no agreement was reached.

Separately, in December 2019, still within the contract’s one‑year protection period, SU submitted a $6.5 million letter of intent through a different broker. Defendants thereafter executed a commission agreement with the other broker recognizing him as the procuring cause and entitling him to a three percent commission upon a completed sale within twelve months.

Around the same time, plaintiff sought to re‑engage defendants. On January 17, 2020, plaintiff’s agent transmitted a proposed “corrected” agreement that would have authorized plaintiff to present the property for an additional 180 days on a non‑exclusive basis and confirmed a two percent commission upon a consummated transaction. Defendants declined to execute the proposal, stating they would not sign anything until an actual offer was submitted, though they remained willing to meet and discuss marketing efforts. In response, plaintiff’s agent continued to pass along expressions of interest, to which defendants generally indicated they would consider solid offers. No offer conveyed by plaintiff was accepted.

Plaintiff alleged that it continued marketing the property to SU and other buyers through September 2020, and that in August 2020, it presented defendants with an offer from a bona fide buyer for $6 million. Within days, defendants entered into a contract to sell the property to SU for the same price. Plaintiff asserted that it first learned of that agreement in December 2020 and promptly demanded a commission, which defendants refused.

On the foregoing facts, plaintiff claimed that the parties, through their post‑contract expiration conduct – e.g., continued communications, plaintiff’s submission of prospective deals, and defendants’ willingness to entertain them – implicitly agreed to extend the expired brokerage agreement, thereby entitling plaintiff to a commission because it had originally introduced SU to the property. Defendants disputed that characterization, contending that the only operative agreement was the written contract, which expired by its terms, that plaintiff did not satisfy the contractual conditions precedent to a commission within the specified periods, and that no course of conduct gave rise to an implied‑in‑fact extension.

Defendants moved to dismiss the complaint pursuant to CPLR 3211(a)(1) and (7).  In a decision and order entered on October 7, 2021, the motion court granted that motion. Plaintiff appealed, and the Fourth Department reversed, concluding that plaintiff had stated cognizable claims, including that there was “an implicit agreement to extend the brokerage contract.”[10] On remittal, defendants filed an answer, the parties engaged in discovery, and defendants moved for summary judgment.

The motion court granted the motion, thereby dismissing plaintiff’s complaint. On appeal, the Fourth Department unanimously reversed, denied the motion, and reinstated the complaint.

The Court held that “defendants failed to meet their initial burden of establishing that the parties did not have an implied-in-fact contract.”[11] The Court found that the communications between one of the defendants and plaintiff’s broker, which were submitted by plaintiff (e.g., text messages, among other communications), “show[ed] that the two continued to discuss offers coming in after the expiration of the 12-month grace period provided for in the brokerage contract, thereby creating a question of fact whether an implied-in-fact contract existed.”[12] As noted by the Court: “[i]n an action to recover a broker’s commission under a theory of an implied contract, ‘the contract may be established in some cases by the mere acceptance of the labors of a broker.’”[13]

Takeaway

University Hill illustrates several principles governing implied‑in‑fact contracts under New York law.

First, University Hill underscores that an implied‑in‑fact contract may arise from the parties’ post‑contract conduct, even after a written agreement has expired. While New York law treats express and implied‑in‑fact contracts as mutually exclusive, the expiration of an express agreement does not foreclose the possibility that the parties, through their subsequent actions, formed a new, implied agreement. As discussed, the continued exchange of communications, especially text messages discussing prospective offers after the contractual protection period had lapsed, was sufficient to raise a factual question as to whether the parties impliedly agreed to continue their brokerage relationship.

Second, University Hill reinforces that the existence of an implied‑in‑fact contract turns on objective manifestations of assent, not subjective intent. The Fourth Department focused on evidence showing that defendants continued to entertain and respond to plaintiff’s efforts, which could reasonably support an inference that they accepted those services under circumstances implying an obligation to pay. This reflects the broader rule that acceptance of a broker’s services, coupled with an expectation of compensation, can itself support the formation of an implied agreement.

Third, University Hill must be read against the backdrop of well‑established limitations on implied‑in‑fact breach of contract claims. The Court did not disturb the general rule that a valid, enforceable express contract governing the same subject matter precludes recovery on an implied theory. Instead, the decision turned on the temporal gap after the express agreement and its protection period had expired, leaving open the possibility that a new, implied arrangement arose. Similarly, the decision does not relax the requirement that assent be clear and unambiguous; rather, it reflects that such clarity may be found in conduct, course of dealing, and ongoing interactions, even if no new written agreement is executed.

Finally, University Hill confirms that a broker’s entitlement to a commission is not always confined strictly to the written terms of a listing agreement. Where the property owner continues to engage the broker’s services, considers the broker’s submissions, and benefits from those efforts, a fact finder may conclude that the parties effectively extended or renewed their relationship by implication.

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Jeffrey M. Haber is a partner and co-founder of Freiberger Haber LLP.

This article is for informational purposes only and is not intended to be, and should not be, taken as legal advice.

Unless otherwise stated, Freiberger Haber LLP’s articles are based on recently decided published opinions or litigation releases and not on matters handled by the firm.

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[1] See Seren Fashion Art & Interiors, LLC v. B.S.D. Cap., Inc., No. 23‑CV‑2349 (JGLC), 2023 WL 7529768, at *4 (S.D.N.Y. Nov. 13, 2023), citing Maas v. Cornell Univ., 94 N.Y.2d 87 (1999).

[2] See NYPRAC‑COMM § 89:14.

[3] Watts v. Columbia Artists Mgmt. Inc., 188 A.D.2d 799 (3d Dept. 1992).

[4]  Jemzura v. Jemzura, 36 N.Y.2d 496, 504 (1975).

[5] Greer v. Fox News Media, No. 22‑1970‑CV, 2023 WL 2671796, at *2 (2d Cir. Mar. 29, 2023) (quoting Nadel v. Play‑By‑Play Toys & Novelties, Inc., 208 F.3d 368, 377 n.5 (2d Cir. 2000)); Beth Israel Med. Ctr. v. Horizon Blue Cross & Blue Shield of N.J., Inc., 448 F.3d 573, 582 (2d Cir. 2006).

[6] Nadel, 208 F.3d at 377 n.5.

[7] Tractebel Energy Mktg., Inc. v. AEP Power Mktg., Inc., 487 F.3d 89 (2d Cir. 2007); see also Arell's Fine Jewelers v Honeywell, Inc., 147 A.D.2d 922, 923 (4th Dept. 1989) (“Whether an implied-in-fact contract was formed and, if so, the extent of its terms, involves factual issues regarding the intent of the parties and the surrounding circumstances.”); Rocky Point Props. v. Sear-Brown Group, 295 A.D.2d 911, 912 (4th Dept. 2002).

[8] See Clark‑Fitzpatrick, Inc. v. Long Is. R.R. Co., 70 N.Y.2d 382, 388 (1987).

[9] Kapral’s Tire Serv., Inc. v. Aztek Tread Corp., 124 A.D.2d 1011, 1012 (3d Dept. 1986).

[10] Univ. Hill Realty, Ltd. v. Akl, 214 A.D.3d 1467, 1468 (4th Dept. 2023) (citations omitted).

[11] Slip Op. at *1.

[12] Id., citing Joseph P. Day Realty Corp. v. Chera, 308 A.D.2d 148, 152 (1st Dept. 2003).

[13] Id., quoting Joseph P. Day Realty, 308 A.D.2d at 152 (internal quotation marks omitted).