What Are The Defenses To Implied Contracts in Contracts?

Defenses to implied contracts typically include lack of mutual assent, the statute of frauds, and the lack of consideration. Other defenses may involve establishing that the contract is unenforceable due to public policy or misunderstanding.

Implied contracts arise not from explicit agreements, but rather from the actions or conduct of the parties involved. Thus, defenses to such contracts often focus on the lack of mutual assent, which occurs when one party can show that they did not intend to enter into a binding agreement despite the other party's belief to the contrary. For example, if one party performed an act without the reasonable expectation of compensation, this may negate the existence of an implied contract.

Another significant defense is the statute of frauds, which requires certain types of contracts to be in writing to be enforceable. If an implied contract falls within the categories covered by the statute of frauds—such as contracts for the sale of goods over a certain amount or contracts that cannot be performed within one year—then the defense can be successfully invoked to argue against the enforcement of the contract.

Additionally, a party may argue that no consideration existed, which is essential for any contract's enforceability, including implied ones. If one party cannot demonstrate that consideration was exchanged, the implied contract may be deemed invalid. Furthermore, an implied contract can be unenforceable if it contravenes public policy or if there was a material misunderstanding regarding the terms.

Finally, a party can also assert defenses based on circumstances surrounding the agreement's formation, such as duress, undue influence, or lack of capacity, which can all undermine the legitimacy of an implied contract.

• 1Cotnam v. Wisdom (1911) - Established the principle that a party may recover under an implied contract when services are provided with the expectation of payment.
• 2Corpe v. Overton (1833) - Confirmed that a person may not be held liable under an implied contract when there was no mutual assent.
• 3Hoffman v. Red Owl Stores, Inc. (1965) - Addressed the concept of reliance in implications and deemed the lack of consideration as a possible defense.
• 4Katz v. Danny Dare, Inc. (1973) - Defined the boundaries of implied contracts concerning equitable defenses like unjust enrichment.

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