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What implied contracts could mean for a construction project

On Behalf of | May 24, 2024 | Contract Disputes and Litigation |

Contracts play a major role in the smooth operation of California construction projects.

One important type is an implied contract. The actions, conduct or circumstances of the parties help form implied contracts.

What is an implied contract in construction?

One common situation is when a contractor begins work based on an oral agreement. If the property owner allows the work to continue and does not object, an implied contract probably exists. This means both parties have responsibilities and expectations similar to those in a written contract.

Another example is when a subcontractor performs work requested by the main contractor without a formal written agreement. If the subcontractor completes the work and the main contractor accepts it, an implied contract could form. It might imply that both parties agree on payment and the scope of work, even in the absence of anything written.

Importance of implied contracts

Implied contracts are important in construction. They help to ensure payments and the completion of work, even without a formal agreement. They provide a legal framework to resolve disputes if something goes wrong. For instance, if a property owner refuses to pay for work based on an implied contract, the contractor may have legal grounds to demand payment.

Preventing misunderstandings

Implied contracts have legal recognition. However, it is always better to have a written agreement. Written contracts clearly outline the scope of work, payment terms and other important details. They reduce the risk of misunderstandings.

Understanding implied contracts in California construction does help both parties fulfill their obligations, fostering a smoother and more predictable working relationship.