A Contract Implied is a Contract Indeed – Sometimes at Least

Introduction

One Friday afternoon, you consult with a painter about painting a building on your business property and he quotes you a price. You intend to get a few more estimates before you make a decision. However, when you arrive at the property on Monday morning, you find that the building has been painted over the weekend! And the painter is there with his invoice, asking for payment of the amount he quoted you the previous Friday.

Are you now legally obligated to pay the invoice? There was no written contract, and you did not believe that an agreement had been reached. But the painter clearly disagrees. Who is right? The answer, most likely, is “it depends.”

Sometimes, actions create contracts you didn’t intend. Typically contracts require offer, acceptance, consideration, capacity, and legality to be enforceable. But implied contracts, formed by actions, can also be enforceable under the right circumstances.

An implied contracts is one that arises from actions rather than from an express agreement. Implied contracts come in two types: implied-in-fact and implied-in-law.

Implied-in-Fact Contracts arise from conduct showing agreement. For example, if you order supplies and the vendor delivers, your acceptance of the goods implies a contract to pay. The elements-offer (vendor’s delivery), acceptance (your receipt), consideration (goods for payment)-are all met. Perhaps most importantly, there is mutual assent established by the parties’ conduct – the goods were delivered and accepted them.

Put this in the context of our painter hypothetical. There was no mutual assent, as you truly did not believe you had hired the painter to paint your building. From your perspective, you were still shopping around for the right painter to hire. And you did not “accept” the work done as you had no idea that the painter was working over the weekend. Under these circumstances, it is unlikely that an enforceable agreement would be implied.

Implied-in-Law Contracts (or quasi-contracts) prevent unfairness. If you notice that your neighbor’s landscaper is mistakenly mowing your lawn, and you allow him to finish before telling him of his error, then a court might require payment to avoid “unjust enrichment,” even without an agreement.

Think back to the painter hypothetical. On Monday morning, you now have a painted building. You have benefitted from the painter’s work, and if you do not pay, the painter will be out the labor and materials used on the job. The painter will argue that you have been “unjustly enriched,” i.e., that you have received a benefit that you knew was not provided as a gift, and you accepted that benefit.

Whether the painter is entitled to payment, or can sue you for payment, will depend on the details. Assume the same basic facts, only now assume that you discussed with the painter the type and color of paint you wanted, the place he could get it, and the price he should pay for it. The painter leaves you a voicemail on Saturday morning saying he has found the color and type of paint you wanted at the price you were willing to pay, and he was on his way to paint the building that morning. You don’t respond to the voicemail.

Does this change the outcome? Does the fact that you supplied more details which the painter was able to meet show assent on your part? Is your silence in response to the phone message enough to show acceptance of the work? Possibly. It wouldn’t be a slam-dunk case, but it certainly gets closer to being an enforceable claim.

In sum, it is important to be careful when contracting for goods and services. Some important things to remember:

• Use Written Contracts: Clearly define terms to avoid implied obligations.
• Clarify Intent: Communicate if you don’t intend to create a contract.
• Document Actions: Keep records of services or goods received.
• Stop Unwanted Work: Halt services you didn’t agree to, like unsolicited repairs.
• Consult a Lawyer: Get advice if you suspect an implied contract.

Revolution Law Group is located in Greensboro, NC, and serves individuals and small businesses throughout the Triad and surrounding areas. To contact us please visit Revolution.law or call 336-333-7907.

The information included here is for informational purposes only, is not exhaustive of all considerations when creating documents, is not intended to be legal advice, and should not be relied upon for that purpose. We strongly recommend you consult with an attorney and do not attempt to create your own documents.