About This Blog
Summaries and analysis of recent Delaware court decisions concerning business-related litigation.
Morris James Blogs
Superior Court: Implied Contract Created When Party Accepts Responsibilities Beyond Written Terms
This case will give pause to contracting parties who consider taking on responsibilities beyond the written terms of the contract.
Here, the parties entered into a contract for the construction of a building. The property owner made a down payment to the builder, pursuant to a contract which placed the responsibility on the property owner to make sure the location did not conflict with any building code or zoning ordinance. But the proposed use violated the zoning code, so a variance was needed.
The Superior Court held that the contract did not require the builder to obtain the necessary approvals from the municipality. Representatives of the builder made this clear to the property owner after signing. Subsequently, however, the builder agreed to seek a variance and conditional use approval, though with the expectation that the property would pay for these services. By that action, the builder created an implied contract, which it materially breached when it did not perform within a reasonable period of time. The property owner was excused from performing and received his deposit as a remedy.