Arthur R. Lehman, L.L.C.

Can a contract dispute arise out of an implied contract?

When two or more New York parties negotiate, make an offer and then accept the terms they offer one another, they form a contract that is then signed by both parties. When this happens, all parties involved know that the contract contains all the terms explicitly-their duties, rights, and obligations-everything is clearly outlined in the document. Though they may be hesitant to sign a contract because of the legalities that arise out of it, there is nonetheless no confusion as to what would happen if there is a breach of contract.

However, not all contracts are express- there are implied contracts as well which can be equally binding. An implied contract is one that exists even though all the terms are not expressly laid out. This is because either the parties assumed there was a contract-known as an implied in fact contract-or denying the contract would result in an unfair result to one of the parties-known as an implied in law contract).

Just because there is no express contract does not mean that parties are not bound legally-their actions and conduct may create an implied contract. This could be where there is intent to promise, but the agreement and promise have not been explicitly expressed. In these situations, courts look to the circumstances and facts surrounding the situation to determine if there is a contract in fact between the parties.

Demonstrating that a breach of contract has taken place when there is no express contract may be complicated-parties have to demonstrate an unambiguous offer and acceptance and consideration and mutual intent to be bound by the terms of the contract from the conduct of the parties than from an express document or oral agreement. However, an experienced attorney can help explain the law and gather the necessary proof to protect one's right in the event of a contract dispute, whether it is express or not.

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