Implied Contracts
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• Implied Contracts
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Review the criteria in your text for determining an implied contract (pages 630–631). Choose three of the criteria and identify a specific case or example that would prove to be contractually binding. In Chapter 18, you read about implied contracts. For this assignment, write a 1–2 page paper that describes the concept of implied contracts. Identify a specific case or example that would prove to be contractually binding and provide your rationale regarding why this is the case. Cite and reference information from your sources according to APA guidelines.
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SAMPLE ANSWER
An implied contract is a legally enforceable agreement that is not in writing. It is created on the basis of the conduct, behavior and assumed relationship of the parties involved. A contract is usually implied when a party accepts benefits in kind from another party because of particular circumstances and the benefit cannot be considered to be a gift. It is therefore the legal obligation of the individual who is receiving the benefit to give a fair value to the benefit that is received (Smitley, 2011).
Criteria for determining an implied contract
There exist various criteria that are used in the legal enforcement of implied contracts. These criteria include basic circumstances such as their being a specific promise that was made in between the parties. The promise also needs to have been given by someone with sufficient authority to enforce and offer that promise. The employer’s behavior and conduct at the time of giving the promise needs to be consistent with policies, industry practices and must be consistent with the promises (Smitley, 2011).
Case study
Mr. Baker had been employed by the common wealth bank for a period of 27 years with his last position at the bank being the senior position of Executive Manager in the Bank’s corporate banking section. A restructuring of the bank unfortunately made his position redundant and even without notice he was given a letter asking him to vacate his desk on the same day. However, because he was a model employee at the bank and had served for several years, the bank made it clear to Mr. Baker that it had preferred to redeploy him to another alternative role of the bank and was even nominated a career support manager and documents to inform him about the new banks redeployment services. He was also directed to hand over his company mobile phone and access to his company email was terminated.
The bank true to its word conducted the redeployment policy but the career support manager who was designated to Mr. Baker was unaware that Mr. Baker could not access the banks communication systems therefore resulting in his fate of not being aware of the activities and the bank was unable to contact him for an extended period of time. The bank therefore failed to adhere to the procedures within the Redeployment Policy. Mr. Baker sued the bank for damages for breach of contract.
Rationale as to why the promise was legally binding
The terms of the mutual contract implied that the mutual trust and confidence that was bestowed between the parties involved did not merely apply to the point of employee dismissal. Therefore, since Mr. Baker was not made redundant, the implied term did not interfere with the right of the bank to provide notice. To apply the term mutual contract to the manner of dismissal was therefore unnecessary and inconsistent with acts of law that deal with unfair dismissal. Therefore, in light of this case study, the breach of the implied agreement occurred independently and before the eventual termination of employment. Therefore, the court ordered that compensation be paid and damages be awarded to Mr. Baker on the basis of an employee’s loss for a chance in redeployment that resulted into the breach
References
Case Study: The implied term of mutual trust and confidence – Catholic Commission for Employment Relations. (n.d.) Retrieved December 4, 2014, from http://www.ccercatholic.org.au/news/196-case-study-the-implied-term-of-mutual-trust-and-confidence
Smitley, M. (2011) Implied contract (2nd rev. Ed.). Sadler, Tex.: First Edition Design eBook Pub.
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