Managing Contract Work: Implied Contract Can be the Basis of a Breach
The Delaware Business Litigation Report reported an interesting construction contract case with the following introduction:
This case will give pause to contracting parties who consider taking on responsibilities beyond the written terms of the contract.
The post (“Superior Court: Implied Contract Created When Party Accepts Responsibilities Beyond Written Terms”) was by R. Christian Walker of DBLR and the case was Gay v. Delmarva Pole Bldg. Supply, Inc., 2008 WL 2943400 (Del. Super. Ct.).
.jpg)
The title of the DBLR post and the introduction provide a pretty good capsule description of the case; we refer you to their post and the case link for factual details.
We don’t normally cover Delaware law but the result in this case, on similar facts, might very well be the same in states other than Delaware - - for example, Connecticut or New York. The case reflects basic contract law but an aspect of it that might be overlooked by busy managers who are not lawyers.
The actual case was complex because there were twists and turns as the story unfolded. But, the principles are basic. Despite the written contract, the Court ruled that the actions of the parties, once the Court unraveled and understood them, created an implied contract and that one of the parties breached the implied contract.
Independent business owners and managers may balk at the suggestion that they should establish strict procedures requiring written approval from customers for changes in the scope of work. It may seem too bureaucratic for an entrepreneurial business. And, some changes may be too trivial to go to the trouble.
But, as implied by DBLR’s introduction, this case is a cautionary example of the possible result if a contractor undertakes work beyond the scope of a project established in a written agreement.
