Opinion ID: 3002730
Heading Depth: 3
Heading Rank: 3

Heading: Contracts Implied in Fact and Implied in Law

Text: Before we apply these principles to this case, we pause to clarify some terminology that often creates confusion in this area of the law. As we have noted, quantum meruit and unjust enrichment are quasi-contract actions (obligations imposed by law in the absence of a contract). Ramsey, 484 N.W.2d at 333. Wisconsin cases sometimes refer to quantum meruit as a contract “implied by law.” E.g., id. (“Recovery in quantum meruit is allowed . . . on the basis of a contract implied by law . . . .”); Gename, 153 N.W.2d at 574 (same). The Wisconsin Supreme Court distinguishes quantum meruit/contracts implied by law from unjust 22 Nos. 08-1067 & 08-1689 enrichment, where there is no implied contract at all. Ramsey, 484 N.W.2d at 333 (“No contract is implied in an action for unjust enrichment.”). Contra W IS. JURY INSTRUCTION-C IVIL 3028 (“Contracts implied in law (Unjust Enrichment)”). This distinction makes sense because there need not be any prior relationship between the plaintiff and defendant for recovery under an unjust-enrichment claim. (Suppose, for example, the plaintiff mistakenly builds a house on the wrong plot of land resulting in a windfall for the defendant, who advantageously happens to own that plot of land.) Wisconsin also recognizes contracts “implied in fact,” but a “quasi-contract or contract implied-in-law differs markedly from a contract implied-in-fact.” Stromsted v. St. Michael Hosp. of Franciscan Sisters (In re Estate of Stromsted), 299 N.W.2d 226, 228 n.1 (Wis. 1980). In contrast to quantum meruit, an implied-in-fact contract is governed by general contract principles. In Theuerkauf, 306 N.W.2d at 657, the Wisconsin Supreme Court explained that a contract implied in fact . . . requires, the same as an express contract, the element of mutual meeting of minds and of intention to contract. The two species differ only in methods of proof. One is established by proof of expression of intention, the other by proof of circumstances from which the intention is implied as matter of fact. Id. (quoting Wojahn v. Nat’l Union Bank, 129 N.W. 1068, 1077 (Wis. 1911) (internal quotation marks omitted)); accord 1 W ILLISTON § 1.5, at 31 (“[A]n implied-in-fact contract arises from mutual agreement and intent to promise, when Nos. 08-1067 & 08-1689 23 the agreement and promise have simply not been ex- pressed in words.”). Thus, Wisconsin recognizes two types of “implied contracts,” but only implied-in-fact contracts rely on contract-formation and breach principles. Compounding the confusion that arises from this linguistic similarity, some Wisconsin cases on quantum meruit invoke impliedin-fact contract cases to describe when a presumption of expected compensation arises. See, e.g., Steffes, 290 N.W.2d at 702 (citing Wojahn, 129 N.W. at 1077, an implied-in-fact contract case). But given the authoritative clarification of quantum meruit in Ramsey, as well as the strong words in Stromsted, we are convinced that the Wisconsin Supreme Court considers quantum-meruit actions to be conceptually separate from contracts implied in fact.