The Importance of Implied-in-Fact Contracts in Texas Contract Law

As a Texas business owner, imagine you have just delivered a big project, only to find there’s no written contract to back your payment claim. Enter the world of implied-in-fact contracts in Texas contract law. Delve into this legal safety net and understand its crucial role in ensuring your hard work does not go unpaid.

Texas law recognizes both written and oral contracts. In an ideal world, you would have signed written contract when you provide services or materials to a third party, and that contract is in place if a third party refuses to provide payment. However, that becomes more complicated when there is no written contract between the parties.

What Happens Without a Written Contract

Luckily, Texas contract law recognizes multiple ways in which a business can pursue payment for materials provided or services performed when there is no written contract with mutual terms.

Texas recognizes an implied-in-fact contract, meaning the parties had a contract based on their behavior (i.e., the way they acted or behaved shows their intent to enter into a contract). There must be some agreement as to the terms of the parties’ agreement for an implied contract to exist, but the most common scenario is where Party A orders goods or services and Party B delivers said goods or services.

Texas also recognizes a quasi-contract, which is similar to an implied-in-fact contract, except that the courts look to the interests of justice to determine whether an unwritten contract exists. Often, where a party performs an unwritten promise to provide services or materials, equity weighs in favor of the performing party for payment by the receiving party.

In either circumstance, payment should be made to the entity providing the goods or services. If payment is not made, seek help from a lawyer for your business to obtain a fair result—which is almost always payment for the goods or services provided.

Can You Recover Without a Written Contract?

Attorneys can review the facts and circumstances surrounding the alleged non-payment and attempt to help you recover those amounts. Attorneys can also assist with drafting contracts (as simple or as complex as you require) to ensure you are never in a situation where you are required to sue over an oral contract.