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Understanding implied contract terms in Minnesota

On Behalf of | Jan 28, 2022 | Blog |

When you enter into a contract with someone, whether written or oral, you are agreeing to be bound by the terms of that contract. But what happens when the terms of the contract are not explicitly stated? This is where implied contract terms come into play. If you are a business owner in Minnesota, it is important to understand implied contract terms as they can affect your legal rights and obligations.

What are implied contract terms?

Implied contract terms are those that are not explicitly stated in the contract but rather are inferred from the actions or words of the parties involved. Generally, Minnesota courts will look at all of the circumstances surrounding the formation of the contract to determine what terms should be implied.

Types of implied contract terms

There are two types of implied contract terms: express and constructive. Express implied contract terms are those that are actually mentioned in the contract. Constructive implied contract terms are those that are not mentioned in the contract but can be inferred from it.

It is important to remember that implied contract terms are not automatically enforceable in a contract dispute just because they are inferred from the contract. For a court to enforce a term, it must meet certain criteria:

  1. It must be necessary to give effect to the intentions of the parties.
  2. It must not be something that could have been easily negotiated and agreed upon by the parties.
  3. It must be reasonable in light of all of the circumstances surrounding the formation of the contract.

Implied contract terms can be an important tool for enforcing the intentions of the parties involved in a contract. It can help you economize on the transaction costs of contracting so that you can focus on what you need to do in time.