Opinion ID: 2587214
Heading Depth: 1
Heading Rank: 3

Heading: The Implied Contract

Text: The second claim involves the breach of a contract implied in fact: [A] contract implied in fact is based on the conduct of the parties to the agreement and it is the conduct itself which establishes the agreement. There is little fundamental difference between an express contract and a contract implied in fact. An express contract is evidenced by the parties' written or oral words. A contract implied in fact arises from the parties' conduct which evidences a mutual intention to enter into a contract. In both cases, a contract is created by the meeting of the minds to contract with each other. See Tuttle v. ANR Freight System, Inc., 797 P.2d 825 (Colo.App.1990). Osband v. United Airlines, Inc., 981 P.2d 616, 621 (Colo.App.1998), cert. denied sub nom., Galileo Int'l P'ship v. Osband, No. 98SC785 (Colo. July 26, 1999). There is no difference in legal effect between express and implied in fact contracts. Tuttle v. ANR Freight Sys., Inc., 797 P.2d 825, 829 (Colo.App.1990). As one commentator states: A good many contracts are never expressed in word, or at least not fully in words. These are genuine understandings between the parties even though they have not been spelled out . . . . The term [implied in fact] only means that the parties had a contract that can be seen in their conduct rather than in any explicit set of words. In other words, the contract is proved by circumstantial evidence. 1 Dan B. Dobbs, Law of Remedies § 4.2(3), at 579 (2d ed.1993). The court of appeals held that attorney's fees could not be awarded for breach of an implied contract, where the damages arose by their very nature outside of the express contract. We disagree. There is no evidence in the record that the implied in fact contract modified the fee-shifting provision contained in the subcontract. The implied contract was subsequent to the express contract. It is true that a subsequent oral agreement between the parties may modify a provision of an earlier written contract, even in the face of a provision in the original contract that modifications must be in writing. James H. Moore & Assocs. Realty v. Arrowhead at Vail, 892 P.2d 367, 372 (Colo.App.1994). Agritrack argues that Article 9's language concerning judicial intervention . . . necessary to resolve disputes between the parties  (and not just disputes under the contract ) is broad enough to encompass their claim based on implied contract. See Rocky Mountain Microsystems, Inc. v. Pub. Safety Sys., Inc., 989 F.Supp. 1352, 1358 (D.Colo.1998) (applying Colorado contract law and finding that fee-shifting provision in an express contract applied to a related claim based on quantum meruit), aff'd without opinion, 173 F.3d 864 (10th Cir.1999). The district court agreed with this argument. The question of whether attorney's fees can be awarded on an implied contract is, at first blush, a legal one and can be easily answered. The answer is no: there is no authority in Colorado law that would permit attorney's fees to be awarded to the prevailing party on a quantum meruit claim. Here, however, the question is not so simple. The underlying contract was in full force, and the jury specifically concluded that Agritrack had not breached it. At the attorney's fee hearing, the question before the district court was whether the fee shifting provision in the subcontract applied to the oral agreement covering the additional work. The district court determined that it did. The interpretation of contractual language is a question of law which we review de novo. Ad Two, Inc., 9 P.3d at 376. The language of the fee-shifting provision in this case, relating to disputes between the parties for which judicial intervention is necessary, is unusually broad. Theoretically, it could be read to apply to all disputes between the parties arising at any time for any cause of action whatsoever, an obviously unintended and absurd result. We do not read it this broadly. We do, however, read it to apply to disputes that arose from the express contract. Here, the dispute over the contract implied in fact, although it pertained to work outside of the contract, arose from the express contract between the parties. It involved the same subject matter, the airport job, and same type of claim, based on contract. In the absence of any finding that the provision was ambiguous, was abrogated by the parties or did not express the true intent of the parties, we conclude that Article 9 of the subcontract authorizes Agritrack to recover the attorney's fees it expended prosecuting its implied contract claim. We therefore reverse the court of appeals on this issue also.