AMI 2404 Contract Express or Implied

Use this instruction if there is an issue as to whether the parties had a valid contract because all or part of the contract is either oral or implied. Use the appropriate bracketed sentences.

When this instruction is used, it should immediately follow AMI 2401. Immediately after this instruction, AMI 2402 should be given.

A contract implied in fact “derives from the ‘presumed’ intention of the parties as indicated by their conduct” where the agreement has not been expressed in words. Such a contract “is proven by circumstances showing the parties intended to contract by circumstances showing the general course of dealing between the parties.” K.C. Props. of N.W. Arkansas, Inc. v. Lowell Investment Partners, LLC, 373 Ark. 14, 29, 280 S.W.3d 1, 14 (2008); Steed v. Busby, 268 Ark. 1, 7, 593 S.W.2d 34, 38 (1980). The elements of a contract implied in fact are identical to those of an express contract. Id. See also Phillips v. Marist Soc. of Washington Province, 80 F.3d 274, 277 (8th Cir. 1996) (the conduct or course of dealing is evaluated from the viewpoint of a reasonable person considering all surrounding circumstances).

Contracts implied in fact are distinct from contracts implied by law. Contracts implied by law, sometimes called quasi-contracts, are not based on implied promises to pay or perform but are obligations created by law to afford justice. Downtowner Corp. v. Commonwealth Securities Corp., 243 Ark. 122, 126, 419 S.W.2d 126, 128 (1967) (distinguishing the two concepts).

In general, the law does not imply a contract when the parties have made a specific one on the same subject matter. Glenn Mechanical, Inc. v. South Ark. Regional Health Center, Inc., 101 Ark. App. 440, 445, 278 S.W. 3d 583, 587 (2008) (a written subcontract covered the dispute). However, this general rule is subject to several exceptions, including the rescission at law of the contract, the discharge of the contract by impossibility or frustration of purpose, mutual mistake of material fact, a disputed performance compelled under protest, and the existence of a contract that fails to address, or fully address, a subject so that the contract is too indefinite on the subject to be enforceable. See QHG of Springdale, Inc. v. Archer, 2009 Ark. App. 692, at 9–13 (holding that a written contract did not preclude an implied claim for unjust enrichment because the written contract between a physician and hospital required “some call rotation” but did “not fully address rotating call” and provided “no yardstick for measuring damages” where the physician was required to provide almost non-stop call coverage); Friends of Children v. Marcus, 46 Ark. App. 57, 876 S.W.2d 603 (1994) (a written placement agreement for the adoption of a child did not preclude an implied claim for restitution of the adoption fee following the agreed dissolution of the interlocutory decree of adoption and return of the child to the adoption agency).