CONTRACTS – Express or Implied by Conduct or Law
A contract is a legally enforceable agreement between two or more contracting parties.
A contract is either express or implied. The terms of an express contract are stated in words. An implied contract is one that is manifested by conduct and its existence and terms are implied from the facts and circumstances (see California Civil Code §§ 1619-1621).
A contract can also be implied in law, such as the covenant of good faith and fair dealing implied by law in every contract.
Oral Contracts Are Valid & Enforceable
A common misconception is that contracts must be in writing to be enforceable – quite the contrary. California law is clear that an oral contract is every bit as valid as a written agreement.
In practice, however, oral contracts are much harder to evidence, and a clearly written document is always preferable so that everyone knows their rights and obligations under an agreement.
Proving Breach of Contract
To recover damages for breach of contract, the plaintiff must prove all of the following:
1. That the plaintiff and the defendant entered into a contract;
2. That the plaintiff did all, or substantially all, of the significant things that the contract required of the plaintiff;
3. That all conditions required by the contract were fulfilled or were excused.
4. That the defendant failed to do something that the contract required (or prohibited) defendant to do; and
5. That the plaintiff was harmed by that failure.
Punitive damages are NOT available in breach of contract actions unless other factors, such as fraud, give rise to a separate claim that might justify an award of punitive damages.