What Is Breach of Implied Contract?

A breach is not defined as those promises laid out explicitly in a contract. Instead, a breach can be any violation of law, principal or obligation. It is this expansive legal definition of breach that leaves room for lawsuits involving breaches of implied contracts.

Read More: Elements of a Breach of Contract

Bringing forth a legal complaint based upon a breach of an implied contract is typically used by an at-will employee who has no employment contract. Gathering evidence for this kind of complaint can be difficult but not impossible. Some forms of obligation that employers promise their employees include positive performance reviews, company handbooks and a manager's oral assertions of confidence. Most often, breaches of implied contract are terminations with no real cause. The types of evidence already listed indicate the implication that your employment will continue. By giving you a positive performance review, the manager is suggesting that your employment will logically extend.

"Word contracts" have a broad definition that can allow legal recourse in circumstances where an employer has breached an implied contract. A contract is seen, in the eyes of the law, as an exchange of vows between parties. This means that a contract does not necessarily need to come on paper and be signed by all involved. Even a tacit understanding is a binding legal instrument, as long as the evidence can be found to demonstrate that such an understanding was in place.

One of the most important parts of defining a contract as a legally binding entity is the presence of a "mirror image" acceptance. This means that the terms, even applied terms, must be agreed upon in an explicit way. This can be a tricky area. A handshake upon job acceptance could easily be considered a mirror image acceptance, but a witness would have to be present in case of later conflict. The main lesson of mirror image acceptance in relation to breach of implied contract is simply getting full-throated acceptance for any major job shift or change. Making the terms explicit can be the necessary step in demonstrating implied contract later.

Often at-will employees will sign an employee agreement, rather than a contract. This agreement is typically designed to nullify much of the evidence needed to combat a breach of implied contract. The agreement will state that company materials, such as mission statements, handbooks and policies, do not constitute a contract. This can be a difficult obstacle to overcome for those who wish to prove a breach of implied contract.