Witten contract vs Implied Contract

Stockton, California, 30 Sept 2000. We closed an Espresso Cafe' due to losing our lease. The landlord whom I was subleasing from and I had a written contract to pay $1500 rent for the month of Sept.

However employees witnessed (They have since moved to North Carolina I cannot get them back for testimony) and some customers witnessed (No address of course) that the landlord who had a business immediatly next door was directing customers to buy their Coffees elsewhere. The resulting sales for the month of Sept. were a total crash. (BEP $6,000 Gross sales $1,800= <$5,200>) This created a large enough gap to be unable to make the rent.

We had other resources but the primary car that I drove to work (75 miles), broke. We had to replace the engine.

Knowing that I was in trouble financially (House was near foreclosure) I wrote the landlord a letter, in a somewhat fustrated tone, telling him that I will pay $100 per month until I can pay it off.

He has cashed checks and mailed back receipts showing payment made and no objection in the envelope or on the paper. I was served about 12 days ago (4/13/2001) for the full amount.

The last receipt shows that he is charging for the Small Claims fileing minus the $100. Though I am in breach of the original contract with the letter and the regular $100 payments (And I REALLY NEED that $100) does this constitute an implied contract and good faith effort to settle this? Am I in a defensible position or shall I tell the family to start packing? (Losing will do damage untold.)

Thank you.
A very
Darkheart

In my opinion, you do not have any defense because you owe the rent money and you defaulted on the payment plan.

Hmmm.....I had hoped that the California statute on contracts that states that -in the case of no fault of either party that the conditions of the contract cannot be fulfilled. - May have allowed some wiggle room.

Or perhaps -one side prevented the other from fulfilling the conditions of the contract.- This one is much harder to prove without the witnesses on hand. All the information being hearsay at this point.

Can payments be arranged with the court, perhaps? I am doing more research but I am nearly immobile (Brain fried?) from worry about this. I will not file chapter anything (Bankruptcy-suggested by freinds-No can do). I can overcome this, just...Well I am in need of direction. I can overcome the problems associated with my job (Paramedic) and the death of patients (two in two day last week) gimme a glimmer o' legal eagle.

I cannot lose when I am so close (Ok 8 weeks may not be THAT close) to getting out of the "leveraged" position. At that time mortgage will return to normal (30% of the current level only 2 more payments!!) Yes, I am worried about losing the house, if I fail in the monday battle and I must come up with the remainder- game set match.

Do the decisions come down immediatly? I have not found any court procedings site on the 'net. Or will there be a delay on decision? OR..Is there any fed or California statute/law/ruling that will make the case need to be 'thought' about for 30-60 days? I should then be able to accomplish both mortgage and pay the ex-landlord without going down in flames.

Ok It is late at the paramedic station, I am the only one up. I beesech thee HomeGuru, give me a sign!

Anybody?

My post stands as written.

Darkheart said:

Anybody?

Click to expand...

In my opinion, you do not have any defense because you owe the rent money and you defaulted on the payment plan.

You asked for 'other' responses. I offer the following:

1) Your post says that you closed your business, "due to losing our lease". Later in your post, you clearly say that you breached your lease (stopped paying rent). The two are not the same.

2) Why was the landlord "directing customers to buy their Coffees elsewhere"?? Also, what proof do you have that this is the ONLY cause for your lose of customers?? Maybe they didn't like the coffee, store, employees, etc. Lots of businesses fail everyday, for a variety of reasons.

3) Your post says, "The resulting sales for the month of Sept. were a total crash. (BEP $6,000 Gross sales $1,800= <$5,200>) This created a large enough gap to be unable to make the rent." What were your September sales for the previous 2 years or so?? How long were you in business at that location?? If you were a 'start-up', you would have a very hard time proving that someone else affected your sales and caused your demise. Further, it sounds like you were under capitalized, rather than blame someone else.

4) Your post continues with, "We had other resources but the primary car that I drove to work (75 miles), broke. We had to replace the engine." I certainly can't blame you for having an unexpected cost (engine replacement), but you also can't justify your not paying rent due to this expense. The landlord was not the cause of this expense, it just happens. That is another reason why you should have had sufficient capital (or credit) to take care of the unexpected, so that it would hopefully have minimal impact on your day-to-day life. Though you may not accept it, you made a conscience decision to use the rent payment for the car repair; either directly, or by not saving enough money to cover the 'happenings of life'.

5) I find your next statement particularly telling, "House was near foreclosure.." With a house near foreclosure, what in the world are you doing trying to make a go of a coffee shop or any other sole-proprietorship. Less than 30% of ALL new companies are in existance in two years, much less showing a profit within the first few years of opening. Again, this sounds like poor financial planning to me.

6) And then to blame the landlord ("I wrote the landlord a letter, in a somewhat fustrated tone, telling him that I will pay $100 per month until I can pay it off.") for HIM not making allowances for your lack of foresight is incredible. Why did you expect him to be a 'sugar Daddy' and provide any assistance to you?? And have you considered what financial hardships he might have had to endure if he had been able to 'carry you'???

7) Your follow-up post says, "Hmmm.....I had hoped that the California statute on contracts that states that -in the case of no fault of either party that the conditions of the contract cannot be fulfilled. - May have allowed some wiggle room." Since I am not familiar with CA statute, I will make the assumption that your statement is valid (unlikely since it sounds like it could be used to void virtually all contracts). But, as shown above, there is a party at fault. If anything, it sounds to me like you were undercapitalized and probably not realistic in your 'business plan' and these either caused, or contributed, to the failure.

8) You ask, "Can payments be arranged with the court, perhaps?" The court is not the creditor and cannot negotiate a payment plan, only the creditor can do that (the court can accept full payment for those debtors who refuse to accept contact with the creditor). Generally, most creditors will accept some 'reasonable' payment plan since it is much less cost and hassle than other methods of enforcement; but remember, the creditor is under no obligation to accept any payment plan that you might offer.

9) You ask, "does this constitute an implied contract and good faith effort to settle this". You have to understand, first and foremost, there is NO SUCH THING as an IMPLIED CONTRACT!!! (Maybe you are confusing this with 'implied warranty'). One of the requirements of a contract is that both parties have to understand the terms and conditions expected of them. This can't be done with 'implications'. Your attempts to arrange some payment schedule may be a 'good faith effort' to settle this, but that has nothing to do with preventing or defending a lawsuit for breach of contract. Unless provided in the contract, there is no statutory obligation for the creditor to accept anything other than the terms in the agreement.

Now, in closing, I offer the following:
If this goes to court and you were to lose (which sounds likely), you will have a set amount of time (usually 30 days to appeal the judgment) before it becomes final. And even then, it usually will take some additional time for the creditor to 'get together' to start enforcement action against you (you might get 30-45 days). I would suggest you contact the creditor and explain your situation about being able to pay in 30 days. Then, when the mortgage is current, divert the full amount to making payments on the unpaid lease. See if he will forego court setting until you can show that you are making payments. Hopefully, he will accept a reasonable delay rather than the hassle of court and enforcing a judgment.

Steve, your my hero.. what a post!

Update

This is just an update. The judge ruled in the favor of the landlord and I must pay $100 per month (Like I have been doing.) But the court costs were the landlords. Not much, $56, but that is the way it went.

Halket, due to the poor state of mind I did leave out some pertaining issues, but it is moot now. For him it was a hollow victory. The status quo stays as is.

We also opened in 1997, bought another company and merged the two. To fast, maybe.

No expectations to have a "Sugar Daddy" . No need to be insulting.

As far as number 9. You must agree that there is such a thing as implied consent. You stated there is implied waranty. So let's look at the following concept.

I hire you to be a Barista for three months paying $100 a day. At the end of three months nothing more is said and you keep coming in and working as a barista and I keep paying you $100 a day. Now the original contract has expired and no longer in force, no verbal contract was undertaken as we never spoke about it. So what you have left is an implied contract.

Even with verbal contracts the intentions of both parties must be expressed, Implied contract is one that is not expressed but is brought about by deeds and actions.

Texas property code 56.001-2 actually uses the term 'implied contract' is actually used, so an implied contract is recognized by the great State of Texas in which you work and/or live. Useing a search engine within the "Texas Statute search" engine shows 2,157 references of an "implied contract." I will not list them all here.

California Civil Code has two important references that I will use here. No application to Texas to be sure. So for your info:

CC. 1619 "A contract is either expressed or implied"

CC. 1621 "An implied contract is one, the existance and terms of which are manifested by conduct"



Thank you for your input and for putting a light under my seat to get me to study for the last 7 days or so. It brought me to focus with the most powerful weapon I have.

First and foremost, I am glad that this situation was resolved.

Now, as to your statements.
You are 'almost' correct when you make reference to 'implied contracts' being provided in Texas law. However, your search was apparently flawed in that you pulled up references that contained both the workds in the same document, as individual words. When you do a search for them together ("implied contract") you will find only four statutes that match the criteria... and none of them are anywhere close to your situation.

As to your 'hoorah' statement that the Texas Property Code even uses the term 'implied contract', that is correct, it is mentioned. However, you should also recognize that this does not mean that a contract exists, only that a court could IMPLY that one existed and IF SO, it could be enforced.

In hindsight, I wasn't clear when I said, "there is NO SUCH THING as an IMPLIED CONTRACT!!" in my earlier post. What I should have said was there is "NO SUCH THING as an 'inherent' IMPLIED CONTRACT!!". Only a court can determine whether an 'implied contract' exists, and whether it would give rise to legal obligations by any party. In fact, most law texts recognize that and, due to the lack of factual standing of the term, they refer to these as 'implied agreements', not contracts.

The 'Merriam Webster Dictionary of Law' says the following on 'implied contract':
1 : a contract that a court infers to exist from the words and conduct of the parties (called also contract implied in fact, implied in fact contract)
2 : "quasi contract" in this entry

The key here is "INFERS TO EXIST".

Also, in most caselaw the application of 'implied agreement' has been applied to employment... not to a dispute as you have.

Bottom line... you recognized that you owed money to the landlord before the lawsuit, the landlord prevailed in court and you are making payments that you had already agreed to. Case closed.