Legal Question in Business Law in California

Re: Silent Contract

I must confess that I haven't heard either of those terms. I would surmise that a "silent contract" could mean a verbal agreement or a presumed agreement based on the customary dealings between the parties.

Similarly, a "silent lease" could mean an informal arrangement between a landlord and tenant.

The problem with both of these is that they "aren't worth the paper they're printed on." An unwritten contract is binding, but it may be hard to prove what the real terms are. An unwritten lease would just be a month-to-month tenancy that could be canceled on 30 days notice.

If you have a small business, it is especially important that you have contracts in writing. I've had too many clients come to me with horror stories about agreements that were either never put in writing, or that they drew up themselves that were too vague to be binding. A few hundred dollars to get a valid contract prepared can save hundreds of thousands later on.

Re: Silent Contract

"Silent contract" is not a recognized legal term. I've checked Black's Law Dictionary and other standard sources and don't find it. The closest common useage is the phrase "The contract is silent as to ----" (price, time for performance, etc.) to mean a term has been omitted, intentionally or inadvertently.

It's more likely that you are referring to some kind of implied contract. In addition to written contracts and oral (sometimes incorrectly called "verbal" contracts), the law recognizes two kinds of contracts (or contract look-alikes)that arise without any express agreement of the parties: (1) contracts implied in fact, and (2) contracts implied in law, or so-called 'quasi contracts.'

Contracts implied in fact are contracts that arise as a result of the conduct of the parties. For example, if I had a written contract to mow your lawn once a week every summer from 1990 to 2000, and it expired, but I continued to mow your lawn in 2001, and you did nothing to stop me, a court could find that there was an implied agreement to extend or renew the former contract on the same or similar terms. Such contracts are inferred from the facts, i.e. the parties behaving as though they had a contract.

A contract implied in law is one that is implied, not by the facts as such, but by the law's unwillingness to allow an unjust enrichment. An often-cited example is a doctor rendering first aid to an unconscious accident victim. Upon recovering, the victim may be found liable to the doctor for the fair value of the medical attention received while unconscious. Obviously, the unconscious victim couldn't give assent to a contract, either in writing, orally, or by acts. To fill the gap, a contract is 'implied in law.' Gramatically, it might be better to say a contract is 'inferred by the law,' but that's not the phrase in use.

Contracts implied in law are called quasi-contracts because they're not really contracts, just legal duties enforced like contracts to prevent injustice.

Hope this helps.