Understanding How Implied Contracts Work Under California Law

Though written contracts are preferable, in the vast majority of cases - after all, a written contract allows the involved parties a suitable reference for evidentiary purposes in the event of a dispute - California law makes oral and various other "implied" contracts generally enforceable, absent specific limiting circumstances.

Consider, for example, a situation in which you are under the impression (despite no oral or written contract having been reached) that you will be paid for painting the defendant's vacation home. You show up and begin to paint. The defendant does not stop you from working, and in fact, watches the situation with some interest - he seems to be pleased. Afterwards, you ask for payment, but the defendant refuses on the basis that no contract was created. Under these circumstances, you could arguably sue and recover damages (restitution damages) as the defendant would otherwise be unlawfully and unfairly enriched by your provision of painting services.

If you have suffered losses due to a breach of contract, but your contract was not explicitly written, then you may still be entitled to damages pursuant to California law. We encourage you to speak to a qualified Mountain View contract attorney here at the Law Offices of Brian J. O'Grady.

Call (650) 318-6131 today for a free consultation.

Determining Whether an Implied Contract Has Been Created

Whether an implied contract has actually been created is central to many breach of implied contract disputes. If you can show that there was an enforceable, implied contract, then the defendant will be on shaky ground and may be willing to negotiate a favorable settlement and end the dispute early.

In California, and elsewhere, there are two types of implied contracts: implied in-fact, and implied at-law. Each applies to different situations.

Let's take a brief look at how they work.

Implied in-Fact

Implied in-fact contracts are manifested by virtue of the particular conduct and relationship of the parties, as well as the overall circumstances of the case. These contracts are neither oral nor written, but are physical in nature. An implied in-fact contract is created only when both parties assent to the implied terms, and each party understands (or has reasonable reason to know) that the conduct they are engaging in will be interpreted by the other party as an assent to the implied terms.

For example, if the defendant brings their car in with a flat tire to your repair shop, and does not say anything to you - even after you begin to replace the tire on their car - then a California court will almost certainly find that an implied in-fact contract was created.

Implied at-Law

Implied at-law contracts involve circumstances under which the law will automatically impose a contractual duty, even if one of the parties does not actually intentional consent to taking on such contractual duties - generally speaking, implied at-law contracts arise in situations where the breach would result in unfair enrichment should damages not be awarded.

For example, if you own a tow truck company, and you respond to a sudden emergency during a flood by helping tow someone's sinking car away from the floodwater, then you would likely be entitled to claim damages if the defendant did not pay you for your services - the court would find that an implied at-law contract was created, as the defendant would otherwise be unjustly enriched.

Implied Contract Issues

Mutual Assent

Mutual assent is necessary in implied in-fact contract scenarios - without mutual assent to the implied contract terms, there is no valid contract to be enforced. As such, you'll have to present convincing evidence that both parties (based on the total circumstances) demonstrated their understanding of the terms and their intentional consent.

Damages May Be Complicated

Damages in implied contract scenarios can be rather complicated. Oftentimes, the damages in implied contract disputes center around restitution damages (i.e., damages for the actual value of the services or goods provided), but in some cases, there may be other damages, such as lost profits, where the breaching conduct clearly led to such losses.

Schedule a Free Consultation With an Experienced Mountain View Contract Attorney

If you have entered into an implied contract, then California law may give you a right of action to pursue damages when that contract is breached - same as any other, standard sort of contract. Importantly, however, you may find that it is somewhat difficult to enforce your contractual rights against the breaching party given the complicated, hard-to-prove fact-patterns typical of implied contract formation.

Here at the Law Offices of Brian J. O'Grady, we have over 36 years of experience representing those who have had their contract breached by another party, including situations that involve implied contracts. We understand that clients may be feeling somewhat vulnerable, or even overwhelmed by the prospect of a violated agreement, and may require significant damage recovery in order to be fully compensated for their losses.

We strongly believe in comprehensive, personalized legal advocacy - to that end, we work closely with clients from the very beginning of the litigation process to keep them apprise of case developments and to ensure that their strategic goals are aligned with our own. By collaborating with clients, we are capable of creating more persuasive overall arguments in their favor.

Call (650) 318-6131 to schedule a free and confidential consultation with an experienced Mountain View contract attorney today. During your consultation, we will evaluate your contract claims and determine the ideal strategy for moving forward.