Oral contracts, implicit contracts, and why they're needed

Russell Turpin deafbox@hotmail.com
Mon, 4 Jun 2001 18:16:32 -0500


Lucas Gonze writes:
> Nah. Oral contracts, a.k.a. implicit deals ..

Oral contracts and implicit contracts are two different
things. An oral contract can be quite explicit: "I'll 
seal your deck by Friday, with Thompson waterseal,
for $50 and one of your wife's apple pies, and yes
I'm covered by liability and contractor's insurance." 
OK, I wrote that. But I could have spoken it. And 
orally, you could have agreed. It would be just as
explicit as the version written above. 

An implicit contract is one where the terms are NOT
expressed, neither orally nor on paper. You walk 
into a restaurant and sit down. The waitress asks,
"What would you like?" You say, "A slice of apple
pie sounds good." After you eat, she brings a bill.
What? A bill?!? You thought she was just being
kind. Never did you *explicitly* agree to pay for the
pie. Well .. the court isn't going to buy that. You 
made an implicit contract when you went through
the socially conventional mechanisms for eating
at a restaurant, thereby accepting the socially 
conventional, implied contract for doing so. 

The world would be a messy place if it weren't 
for implicit contracts. Cafeterias, restaurants,
and gas stations would be far less convenient and
carry far more friction if we had to make explicit
contracts before engaging in business.

Importantly, implicit and explicit are the far sides
of a spectrum, not end points. No contract is
perfectly explicit, because no piece of speech 
-- perhaps excepting mathematics -- is perfectly 
explicit. Nor is a contract purely implicit. You 
did say you'd like a slice of apple pie, after all.

Russell