What is indicated by a tacit agreement?

A tacit agreement refers to an understanding that is reached without the necessity for explicit communication. This type of agreement exists when parties behave in a manner that indicates an understanding or consensus, despite not having verbally or formally outlined their terms. For example, if two parties consistently meet and conduct business without ever formally discussing their arrangements, their ongoing actions may be interpreted as tacitly agreeing to certain terms.

In contrast, the other options describe agreements that are characterized by explicit communication, formality, or the involvement of legal representation, which is not applicable to a tacit agreement. Formal written contracts require deliberate drafting and signatures, and spoken agreements involve clear verbal communication, both of which contradict the idea of an implied understanding based solely on behavior. The presence of legal representation also suggests a level of formality that is absent in tacit agreements, focusing instead on implicit consensus among parties through their actions.