When employment issues arise, it is helpful to back up your case with a written contract. Unfortunately, many agreements conducted in the workplace are implied or oral agreements. If you find yourself with an employment issue, but you had an implied or verbal agreement, you might still be able to develop a strong case.
While it is always a good idea to put all contracts in writing, it is not always necessary to create an enforceable contract. Our California employment law attorneys explain what implied contracts are and what you need to prove that you had one.
What Is an Implied Contract?
An implied contract is created when two or more parties have no written contract, but according to employment laws, there is still an obligation in the interests of fairness based on the parties’ conduct or circumstances. There are two different types of implied contracts:
Contracts that Are Implied-in-Fact
An implied-in-fact contract creates an obligation between the parties based on the facts of the situation. The law would consider this an implied-in-fact contract based on both parties’ prior conduct, such as consistency in situations.
Contracts that Are Implied-in-Law
With an implied-in-law contract, the law imposes a duty to perform—enforce the contract even against a person's will. For an implied-in-law contract to be valid, you will need to prove that there are circumstances that would lead one party to be unfairly enriched by another party's action.
How to Prove That You Have an Implied Contract
When determining whether an implied-in-fact or implied in-law contract exists, courts may consider several factors, including:
- The nature of the relationship between the parties
- How long the parties have known each other
- Whether the parties have entered into similar agreements before
- Whether the parties have performed any duties under an agreement
- The conduct of the parties
- Industry customs, habits, and trade practices
- Market values and standards in the area