It is typically recommended that any type of agreement between two parties, such as an employer and an employer, be signed. This type of contract is more enforceable than when it is one party’s word against the other’s. However, it is a myth that contracts must always be “in writing” to be enforced by a court of law.
While there are certain instances that a written contract is indeed necessary, oral and implied contracts are the basis for many jobs and can be recognized as an enforceable legal agreement in the context of employment. If you believe that your employer breached an oral or implied contract, Shegerian & Associates may be able to assist you.
Implied vs. Oral Contracts
Of the many types of contracts used in employment, implied and oral contracts are similar in that they are not bound in totality by words on paper and the signatures of both parties. However, they do each have their unique characteristics:
Implied Contract Definition
An implied contract may be partially written, but most often is based on a set of circumstances which courts analyze to determine whether a contract indeed exists. This means that even if there is no written contract or only behavior and circumstances that could or could not indicate the presence of an enforceable agreement, courts can legally determine that a contract does indeed exist as a matter of fact.
Implied contracts can be classified into two forms: implied-in-fact and implied-in-law. An implied–in-fact contract is created by circumstances surrounding the involved parties’ behavior that suggests a mutual intent to have an agreement involving obligations on both sides. Meanwhile, an implied-in-law contract is a legally binding contract that neither party intended to create, yet the court concludes they should be bound by due to a set of circumstances rather than the behavior of the involved parties.
Oral Contract Definition
An oral contract is usually not written and is based on the verbal agreement between two or more parties. Employees should take care to note that oral or verbal contracts generally have shorter statute of limitation time periods than written contracts. For example, in the state of California, the time period for filing a lawsuit involving an oral contract is two years, compared to four years for a written contract.
At-Will Employment and Implied Contracts
Proving implied and oral contracts is sometimes necessary when an employee is claiming employment terms beyond the typical at-will scenario. According to California Labor Code 2922, all employees operate under a presumption of at-will employment if both parties have made no oral or implied agreement specifying the length or employment or grounds for termination.
Proving Implied and Oral Employment Contracts
If it can be shown that an implied or oral employment contract did exist, and your employer fires you despite this contract, you may have grounds to sue your employer by filing a wrongful termination lawsuit. In order to prove this, you must show that your employer’s past behaviors or conduct created an implied contract to not terminate you without good cause. Factors that can be used as evidence to prove an implied contract include:
- Your employer’s general policies and procedures
- The length of time you worked for your employer
- The nature of your relationship with your employer
- Specific communication from your employer indicating that you can count on employment
- Testimonies from other employees
- Practices within the industry you were working in
Keep in mind that, even with an implied contract, your employer still has the right to fire you “with good cause,” such as poor performance or violating company policy. However, the definition of “good cause” can be subjective and may be a front for some type of illegal behavior, so don’t take this type of defense at face value without consulting with an attorney.
While an implied contract can be determined based on the facts and circumstances surrounding a case, an oral contract is proven differently. This is due to the fact that there is rarely hard evidence to support an oral contract’s existence. Rather, courts look to whether a party to the oral contract took action relying on the alleged terms of the contract, such as beginning and completing work or services based on promises made about payment.
Helping You Prove an Implied and Oral Contract
If your employer is in breach of an implied contract, you may be entitled to damages for wrongful termination, however, they will be limited by the implied contract. Such damages may consist of:
- The total amount you would have earned from the day you were terminated to the day you received your court verdict, including pay, benefits, and bonuses
- The total value of the amount you would have earned from the date of the verdict for as long as your employment would have expected to have continued, minus the amount you could have earned from substantially similar employment within that time frame
Without prior legal experience, implied and oral contracts can be difficult to discern. Knowing when one exists however, could be crucial to proving whether or not a termination of employment was legal.
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The term ‘at-will employment’ refers to an employer’s right to terminate employment for any cause, at any time. Likewise, an employee is free to leave a job at any time for any or no reason with no adverse legal consequences. When an employee believes he or she is entitled to their job based on terms that limit the at-will employment doctrine, the employer may ask the court to determine that an implied contract exists based on the facts and circumstances of the case. This is because an implied employment contract is an exception to the at-will employment doctrine.
If you believe you have been unjustly terminated from employment based on the existence of an implied or oral contract, contact Shegerian & Associates as soon as possible. Our experienced attorneys can provide the quality legal analysis you need to get the justice you deserve.
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Yes. Like written contracts, verbal agreements can also be legally binding and can even hold up in court when there is sufficient evidence to prove the existence of such agreement.
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There is a breach of an implied or oral contract when a party who promises to provide a service according to the terms in the contract, fails to do so. The three elements a party must show are a valid contract, a material breach and damages. Other forms of breaches can be:
- A change in the terms of the implied contract without the consent of the other
- There is unwillingness and inability to perform the obligations in the contract.
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Examples of implied and oral contracts are:
- An oral contract for trade
- Sales of certain goods
- Contracts related to payment of debt
Note, however, that for employment contracts, written agreements are recommended.
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Subject to the knowledge of your counsel, here are some common defenses in breach of contract lawsuits:
- There was fraud or mistake in signing or giving consent to the agreement
- There was coercion or deception
- The contract failed to express the true intent of the parties
To know more about invoking the proper defense in a breach of contract lawsuit, hire a lawyer to guide you through the process.
If you believe you have been unjustly terminated from employment based on the existence of an implied or oral contract, contact Shegerian & Associates as soon as possible. Our experienced attorneys can provide the quality legal analysis you need to get the justice you deserve.
