Opinion ID: 2805587
Heading Depth: 3
Heading Rank: 1

Heading: Express Contracts

Text: The circuit court concluded that the Management Agreements – the express contracts executed by Spectra-4 and Jefferson/LBG, and by Spectet and Jefferson/LBG – did not govern the relationship between Spectra-4 and Uniwest, and between Spectet and Uniwest. On appeal, Uniwest argues that it succeeded to the Management Agreements, or that the Management Agreements were assigned to it, and thus the express contracts 2 An implied-in-law contract governing the subject matter at hand does not exist between Spectra-4 and Uniwest, and between Spectet and Uniwest, because as set forth below implied-in-fact contracts exist between these sets of parties. City of Norfolk, 120 Va. at 374, 91 S.E. at 825 (The fiction of an [implied-in-law contract] will not be indulged in every case, but only where, in equity and good conscience, the duty to make such a promise exists.). 7 set forth in the Management Agreements directly governed Uniwest's management services. We disagree. The circuit court concluded that the Management Agreements were cancelled when the State Corporation Commission automatically cancelled the corporate existence of Jefferson/LBG. See Moore v. Crutchfield, 136 Va. 20, 25, 116 S.E. 482, 483 (1923); Lucas v. Pittsburgh Life & Trust Co., 137 Va. 255, 271, 119 S.E. 109, 114 (1923); see also Martin v. Star Publishing Co., 126 A.2d 238, 243 (Del. 1956); Solomon v. Greenblatt, 812 S.W.2d 7, 17 (Tex. Ct. App. 1991); WyomingIndiana Oil & Gas Co. v. Weston, 7 P.2d 206, 209-10 (Wyo. 1932). We need not decide whether that holding was correct because, regardless of the status of the rights and obligations under the Management Agreements as entered into by Spectra-4, Spectet, and Jefferson/LBG, those rights and obligations were never extended to either Jefferson Commercial or Uniwest. Neither Jefferson Commercial nor Uniwest succeeded to or were assigned any rights and obligations created under the Management Agreements. See Layne v. Henderson, 232 Va. 332, 338, 351 S.E.2d 18, 22 (1986) (providing the plain meaning of successor in a contract); J. Maury Dove Co. v. New River Coal Co., 150 Va. 796, 827, 143 S.E. 317, 327 (1928) (setting forth the general rule of how a contractual obligation may be assigned). Jefferson Commercial and Uniwest were not parties 8 to the Management Agreements, are entities legally distinct from Jefferson/LBG, did not merge with Jefferson/LBG, acquired no stock and no assets from Jefferson/LBG, and entered into no contracts with Jefferson/LBG. Simply put, Jefferson Commercial and Uniwest were strangers to the Management Agreements when those express contracts were executed, and remained strangers to the Management Agreements even as Jefferson Commercial and Uniwest provided management services for the commercial buildings. And although an asset purchase agreement was executed between Jefferson Commercial and Uniwest, Jefferson Commercial could not sell the Management Agreements to Uniwest because Jefferson Commercial never acquired an interest in those express contracts. 3 3 These facts also establish why, contrary to Uniwest's arguments to the circuit court, this appeal does not implicate ratification or acceptance by performance. Ratification is an adoption of a contract made on [a party's] behalf by [a third person] whom [the party] did not authorize, which relates back to the execution of the contract and renders it obligatory from the outset. Reid v. Field, 83 Va. 26, 33, 1 S.E. 395, 399-400 (1887). Jefferson/LBG did not execute the Management Agreements on Uniwest's behalf. Uniwest could not ratify contracts not entered into on its behalf. The doctrine of acceptance by performance stands for the proposition that [t]he absence of an authorized signature does not defeat the existence of the contract if a party's conduct denotes acceptance of an offer. Galloway Corp. v. S.B. Ballard Constr. Co., 250 Va. 493, 505, 464 S.E.2d 349, 356 (1995). As related to the Management Agreements, Spectra-4's and Spectet's offers were directed to Jefferson/LBG. Uniwest could not accept – by writing or performance – an offer never made to it. 9 Thus, the Management Agreements were express contracts that governed only the relationship between Spectra-4 and Jefferson/LBG, and between Spectet and Jefferson/LBG. The circuit court did not err in holding that the Management Agreements did not directly govern Uniwest's management services.