Tacit Agreement Case Law: What It Means And How It Affects Your Business
As a business owner, you likely enter into countless contracts and agreements each year. These agreements are essential to running a successful business, as they ensure that everyone involved is on the same page and has a clear understanding of their roles and responsibilities. However, not all agreements are explicitly written or signed, and this is where tacit agreement case law comes into play.
What Is Tacit Agreement Case Law?
Tacit agreement case law refers to agreements that are not explicitly stated but are instead inferred based on the behavior of those involved. These agreements can be just as binding as written agreements and can be used to resolve disputes in court.
For example, suppose two companies have a longstanding business relationship where one company regularly supplies goods to the other. Even though there is no written agreement between the two companies, the fact that the supplier regularly provides goods to the other company implies an agreement to do so. If the supplier suddenly stops providing goods, the other company could argue that there was a tacit agreement that the supplier would continue to provide goods, and the case could go to court.
How Does Tacit Agreement Case Law Affect Your Business?
As a business owner, it`s essential to understand that tacit agreements can be just as binding as written agreements, which means that you need to be careful about the behavior of your business and your employees. Even the slightest actions or words uttered could potentially create a tacit agreement that could come back to bite you in a legal dispute.
Additionally, it`s crucial to understand that tacit agreements can be constructive or implied, and both types can have legal ramifications. Constructive agreements are those that are inferred based on the actions of the parties involved, such as the supplier example mentioned above. Implied agreements, on the other hand, are those that are inferred based on the nature of the relationship. For example, if you hire an employee to perform a specific task, it is implied that the employee will complete that task to the best of their ability in exchange for payment.
Conclusion
Tacit agreement case law is an essential aspect of business law that every business owner should understand. While written agreements are more explicit and straightforward, tacit agreements can be just as binding and can have legal ramifications if not carefully managed. As such, if you are unsure about whether a tacit agreement exists, it`s best to seek legal advice. Ultimately, understanding tacit agreement case law can help you avoid legal disputes and ensure that your business runs smoothly.