This section is from the book "American Commercial Law Series ", by Alfred W. Bays. Also available from Amazon: American commercial law series.
Any contract may be oral which the law does not require to be in writing.
The general rule is that any contract may be oral (or implied) if some statute does not require it to be in
145. German F. Ins. Co. v. Gueck, 130 111. 345, 23 N. E. 112.
146. Muskogee Land Co. v. Mullins, 165 Fed. 179.
writing.147 An oral contract is of equal dignity with any simple written contract, but the evidence of course, is not so satisfactory or enduring.
A contract implied in fact is a contract the evidence of which consists in the circumstances which show forth a contractual intention.
Actions may bespeak a contract. Such a contract we speak of as implied. Usually, however, an entire contract is not implied, but merely some part thereof.
When will circumstances indicate the existence of a contract? Whenever we may say that the relationship which the parties bear toward each other is more reasonably explained on the theory of contract than any other, a contract will be implied. In other words, an implied contract is a true contract evidenced by the circumstances as existing between the parties.
Example 64. A orders coal from his dealer saying nothing about prices. B delivers the coal. The inference here is that A intended to pay and B to receive pay for the coal. If B sues for the price he could recover upon A's implied promise to pay the price that B was then getting for his coal from his customers - the market price. Here, though B's promise is implied, it is just as real as though he uttered the words. To overcome this inference of a promise, he could show, if such were the fact, that B promised to make him a present of the coal.
As we have heretofore noticed, the law will not supply or infer terms of a contract merely because they are
147. McKennon v. Winn, 1 Okla. 327.
lacking. An agreement to sell a horse, no price being mentioned, would simply be an incomplete contract, as such price could not be reasonably inferred, there being no market price which we could assume the buyer intended to pay.
If the circumstances are more readily explainable upon some other theory than that of contract, no contract will be implied.
Example 65. A stays at home and helps his father upon the farm, while his two other sons go out to earn their living away from home. The father dies. There being no will A regards it as unfair that there should be an equal division and puts in his claim against the estate for his labor. The courts have taken the position that A's filial devotion explains his conduct rather than the theory of contract, and therefore deny his claim. A could show, however, if such were the fact that there was in fact, a contract between himself and his father, but he would have to show more than the facts stated, as for instance, that the father kept an account of the amounts becoming due the son, or that the son kept one, with the father's knowledge and consent.148