What are Implied or Oral Contracts?

Of the many types of contracts used in employment, implied and oral contracts each have their unique characteristics. 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. An oral contract is usually not written and is based on the verbal agreement between two or more parties.

What are the Unique Characteristics of an Implied Contract?

One of the most important aspects of an implied contract is that it is based on the decision of a court of law. 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.

Oral Contracts are Enforceable Unless…

Oral contracts are made by verbal agreement rather than in writing.  Employees should take care to note that oral 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.

Proving Implied and Oral Employment Contracts

Proving implied and oral contracts is sometimes necessary when an employee is claiming employment terms beyond the typical at-will scenario. The term ‘at-will employment’ refers to an employer’s right to terminate employment for any cause, at any time. When an employee believes he or she is entitled to her job based on terms that limit the at-will employment doctrine, she may ask the court to determine that an implied contract exists based on the facts and circumstances of the case.

Essentially, the relevance of implied and oral contracts in employment law is to show that just cause is necessary before employment can be terminated. If an employee successfully alleges that an implied or oral contract required just cause before termination, then it would be up to the courts to determine whether the termination was legal according to the law.

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.

Implied and Oral Contracts Can Be Difficult to Discern

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.

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.