Breach of Third-Party Contract, Contract Implied in Fact, or Contract Implied in Law

What are third-party contracts, contracts implied in fact, and contracts implied in law?

Third-party contracts, contracts implied in fact, and contracts implied in law are all essential concepts in business litigation. Under Florida law, a third-party contract is a type of contract in which an agreement between two parties has some benefit to a third party. This third party can be a person or organization not directly involved in the contract.

A contract implied in fact and a contract implied in law are similar in that they are not expressly made contracts but differ in their basis. Implied-in-fact contracts form through the parties’ conduct. On the other hand, courts create implied-in-law contracts to prevent one party from being unjustly enriched at the other party’s expense.

An implied-in-fact contract is an agreement between parties where the parties have not explicitly stated the terms and existence of the contract, but their conduct and actions imply a contractual relationship. For example, if a business hires a supplier to provide goods, but the agreement does not specify a delivery date, the supplier must deliver the goods within a reasonable time frame. If the supplier does not provide the goods within a reasonable time frame, it could be considered a breach of contract.

A contract implied in law is also known as a quasi-contract, a legal remedy that courts use to prevent one party from benefiting at the expense of another party unjustly. It is not an actual contract but rather an obligation imposed by law. For example, if a homeowner hires a contractor to repair a roof, but the owner does not agree to the contract, the court can imply a contract that obligates the owner to pay the contractor for the work.

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What measures must a party take to avoid breaching third-party contract, contract implied in fact, or contract implied in law?

A breach of a third-party contract occurs when one of the parties breaches an agreement between them, which affects a third party who was not a party to the original agreement. The third party has the right to sue for the breach if they have suffered damages due to the breach. Under Florida law, the elements of a third-party contract are:

·        Two parties must enter into the agreement

·        The third party must be an intended beneficiary of the contract

·        The third party must have relied on the contract in some way

·        The breach of contract must have caused damages to the third party.

In contrast, a breach of a contract implied in fact occurs when one or both parties fail to meet the expectations of the contract implied by their conduct. The breach of a contract implied in law occurs when one party benefits from the other party’s unjust enrichment.

Best practices to comply with third-party contracts, contracts implied in fact, and contracts implied in law in Florida include, among others:

·        Clearly defining the parties involved in the contract and the scope of their obligations

·        Ensuring that the contract is in writing and signed by all parties involved

·        Avoiding making assumptions about the terms of the contract

·        Including an arbitration clause to resolve disputes in a less costly and time-consuming manner

·        Including a termination clause that outlines the process for terminating the contract

·        Keeping all records related to the contract in a secure location

·        Ensuring that all parties involved in the contract understand the terms of the agreement

·        Sticking to the terms of the agreement and addressing any issues or disputes promptly to prevent a breach

What are relevant laws related to third-party contracts, contracts implied in fact, and contracts implied in law in Florida?

Florida’s statutes and case law govern third-party contracts, contracts implied in fact, and contracts implied in law in business litigation matters. Key laws include:

• Florida Statutes Chapter 671: Florida’s adoption of the Uniform Commercial Code (UCC) regulates transactions related to the sale of goods and contains provisions relevant to third-party contracts.
• Florida Statutes Chapter 95: This chapter establishes the statute of limitations for breach of contract claims, including those related to third-party contracts and contracts implied in fact or in law.
• Florida case law: Decisions made by Florida courts serve as precedents for future cases involving third-party contracts, contracts implied in fact, and contracts implied in law (g., Smith v. Piezo Tech. & Prof’l Adm’rs, 427 So. 2d 182 (Fla. 1983); Hitchcock v. Long, 142 So. 3d 906 (Fla. 4th DCA 2014)).

What must be proven to successfully file a lawsuit for breach of third-party contract, contract implied in fact, or contract implied in law, and what are common legal defenses to those claims? 

To file a lawsuit for breach of third-party contracts, contracts implied in fact, and contracts implied in law in business litigation matters, a plaintiff must first comply with Florida’s procedural requirements, such as filing a complaint, serving the defendant, and complying with Florida’s statute of limitations. (Fla. Stat. § 95.11).

To file a lawsuit for breach of a third-party contract, the plaintiff must show the following:

• A valid contract exists between the plaintiff and a third party;
• The defendant was aware of the agreement between the plaintiff and the third party;
• The defendant intentionally interfered with the contract; and
• The plaintiff suffered damages as a result of the defendant’s interference.

To file a lawsuit for breach of a contract implied in fact, the plaintiff must show the following:

• An implied contract existed between the parties;
• The parties agreed to perform certain obligations;
• The defendant failed to perform their obligations under the contract; and
• The plaintiff suffered damages due to the defendant’s failure to perform.

To file a lawsuit for breach of a contract implied in law, the plaintiff must show the following:

• A special relationship existed between the parties, such as a landlord-tenant relationship or a physician-patient relationship;
• The defendant breached a duty owed to the plaintiff under the special relationship;
• The plaintiff suffered damages as a result of the breach of duty; and
• The breach of duty was the proximate cause of the plaintiff’s damages.

Legal defenses against these claims may include:

• Statute of Limitations: The claim is barred if the plaintiff did not file suit within the period set by Florida law.
• Lack of Capacity: The defendant did not have the legal capacity to enter into the contract.
• Illegality: The agreement is unenforceable because it violates the law or public policy.
• Mistake: A mutual mistake of fact or a unilateral mistake made by the defendant and known by the plaintiff at the time of contracting may render the contract unenforceable.
• Fraud or Misrepresentation: False statements or concealment of material facts by the plaintiff induced the defendant to enter into the contract.
• Duress or Undue Influence: The defendant entered into the contract under coercion or undue pressure.

To see what actions or defenses may be available for your unique situation, please contact our office to set up your initial consultation.

Frequently Asked Questions

1. Can a plaintiff sue for breach of contract without a written agreement?

Yes, a plaintiff may sue for breach of contract even without a written agreement. Under Florida law, contracts can be oral, written, or implied based on the conduct of the parties (Smith v. Piezo Tech. & Prof’l Adm’rs, 427 So. 2d 182 (Fla. 1983)).

2. How long does a plaintiff have to file a lawsuit for breach of contract in Florida?

Florida’s statute of limitations for breach of contract claims is generally five years for written contracts and four years for oral contracts, starting from the date of the breach (Fla. Stat. § 95.11).

3. Can a party be held liable under a contract they didn’t sign?

In some cases, a party may be held liable under a third-party contract if they are a third-party beneficiary, meaning the parties entered into the agreement to benefit the third party (Hitchcock v. Long, 142 So. 3d 906 (Fla. 4th DCA 2014)).

Have more questions about a breach of contract related situation?

Crucially, this overview of third-party contracts, contracts implied in fact, and contracts implied in law does not begin to cover all the laws implicated by this issue or the factors that may compel the application of such laws. Every case is unique, and the laws can produce different outcomes depending on the individual circumstances.

Jimerson Birr attorneys guide our clients to help make informed decisions while ensuring their rights are respected and protected. Our lawyers are highly trained and experienced in the nuances of the law, so they can accurately interpret statutes and case law and holistically prepare individuals or companies for their legal endeavors. Through this intense personal investment and advocacy, our lawyers will help resolve the issue’s complicated legal problems efficiently and effectively.

Having a Jimerson Birr attorney on your side means securing a team of seasoned, multi-dimensional, cross-functional legal professionals. Whether it is a transaction, an operational issue, a regulatory challenge, or a contested legal predicament that may require court intervention, we remain a tireless advocate every step of the way. Being a value-added law firm means putting the client at the forefront of everything we do. We use our experience to help our clients navigate even the most complex problems and come out the other side triumphant.

If you want to understand your case, the merits of your claim or defense, potential monetary awards, or the amount of exposure you face, you should speak with a qualified Jimerson Birr lawyer. Our experienced team of attorneys is here to help. Call Jimerson Birr at (904) 389-0050 or use the contact form to set up a consultation.