Contracts implied-in-fact like a form of will expression

These types of contracts became the prototype of modern implied-in-fact contracts. However, Roman law's limited range of contracts could not regulate all contractual relations, which led to the emergence of innominate contracts based on verbal formulas: Do ut des (I give so that you provide), Do ut facias (I give you to do), Facio ut des (I make you provide) and Facio ut facias (I do that you will do). Geoffrey MacCormack, `Contractual Theory and the Innominate Contracts' (1985) 51 Studia et documenta historiae et iuris 131.

Consequently, we can assert that conclusive actions used for these contracts arising from actions (re) are rooted in these innominate contracts. The utilisation of innominate contracts played a crucial role in the legal recognition of the variability of consensual agreements, particularly when one party's legally significant actions necessitated the fulfilment of obligations by the other party. The emergence of nameless contracts significantly contributed to the development of implied-in-fact contracts.

However, for the modern understanding of implied-in-fact contracts, it is necessary to mention the synallagmatic contract. It is separate from the innominate contracts type of agreement, which is analogue to modern bilateral contracts. Current implied-in-fact contracts can be bilateral. This makes their legal nature close to synallagmatic contracts. This approach was confirmed by Lord Diplock: “Every synallagmatic contract contains in it the seeds of the problem - in what event will a party be relieved of his undertaking to do that which he has agreed to do but has not yet done?”. Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1961] EWCA Civ 7 <https://www.bailii.org/ ew/cases/EWCA/Civ/1961/7.html> accessed 07 January 2024.

A one-sided contract does not provide for coordination of the parties' will and their mutual manifestation; the parties do not have counterclaims because one party is given rights, and the other party is given duties. Although every right gives rise to obligations, and obligations give rise to rights, the one-sidedness of relations is determined through the category of interest of the parties, which is not aimed at creating mutual obligations. Separating unilateral contracts and obligations from unilateral actions is necessary.

For example, when advertising a product, the company claims its properties and rewards anyone who disproves them. Such models can be seen in the activities of pharmaceutical companies (denying the effectiveness of drugs), IT companies (software hacking), etc. If someone fulfils the announced conditions, even without entering into a separate contract, this can be considered a unilateral action, not a unilateral contract. Carlill v Carbolic Smoke Ball Company [1892] EWCA Civ 1 <https://www.bailii.org/ew/cases/ EWCA/Civ/1892/1.html> accessed 07 January 2024. Such cases differ in British, American, and European courts. British courts throughout the century remained content to reward those who supplied the requisite information in ignorance of the offer. American courts held this inconsistent with the contractual requirement of offer and acceptance. For them, a claim to a reward could only be based on a contract, and for a contract to exist, there had to be mutual consent, which required an intention to accept an offer. Oliver Wendell Holmes, The Common Law (Dover Pub Inc 1991). In this matter, American case law is closer to civil law. For example, a public reward promise in Ukraine is classified as a non-contractual commitment. Civil Code of Ukraine no435-IV of 16 January 2003 (as amended of 01 January 2024) <https://zakon.rada.gov.ua/laws/show/435-15#Text> accessed 07 January 2024. Such contracts are implied contracts because they arise from the conduct of persons rather than from an oral or written agreement between the parties.

Implied-in-fact contracts are unilateral in the relationship of a gift of movable property. Gift deeds are regulated differently in common and civil law, but their content is reduced to transferring movable and immovable property without a counterclaim. For example, when a husband gives flowers to his wife, and she accepts them, a gift contract arises between them.

Therefore, implied-in-fact contracts can be applied to bilateral and some unilateral agreements, which is a fundamental aspect of understanding their essence. We will see this in more detail when considering the responsibility for the failure of contracts implied in fact and when analysing the mechanism of concluding such agreements.

These ideas are close to the principle of non-concedit venire contra factum proprium, which prohibits exercising rights contrary to one's previous behaviour. In modern contract law, non concedit venire contra factum proprium is akin to the principle of good faith, which prohibits the repudiation of an intention declared by the conduct of the person who testified to the desire to enter into the contract. Implied-in-fact contracts are rooted in this idea. Today, the principle non concedit venire contra factum proprium has adopted the form of inconsistent behaviour. Its application can be seen in Art. III.--1:103 of the Model Rules of European Private Law. Christian von Bar, Eric Clive and Hans Schulte-Nolke (eds), Principles, Definitions and Model Rules of European Private Law: Draft Common Frame of Reference (DCFR) (interim outline edn, Sellier European Law Pub 2008).

The analysis of this norm allows us to say that behaviour contrary to good faith and fair business practice does not correspond to the previous statements or behaviour of the party, provided that the other party, acting to its detriment, reasonably relied on them.

The continuation non concedit venire contra factum proprium can also be found in Art. 1.8. UNIDROIT Principles 2016: “A party cannot act inconsistently with an understanding it has caused the other party to have and upon which that other party reasonably has acted in reliance to its detriment.” UNIDROIT Principles of International Commercial Contracts (UNIDROIT 2016) art 1.8.

The application of the principle of good faith is reflected in Ukrainian court practice regarding fraudulent transactions. According to this practice, the legal consequences of invalid transactions that contradict the previous conduct of a party to the detriment of the other party are not recognised.

In the case № 390/34/17 in 2019, the Ukrainian Supreme Court applied the doctrine of venire contra factum, which is based on the principle of good faith in resolving the dispute. Contradictory behaviour is inconsistent with a party's previous statements or behaviour if the other party acts and relies on it to its detriment. Case of no 390/34/17 (Cassation Civil Court of the Supreme Court, 10 April 2019) <https://reyestr.court.gov.ua/Review/81263995> accessed 07 January 2024.

This norm is also relevant to understanding implied-in-fact contracts. The content of this norm confirms that a person is responsible when performing actions that another person perceives as consent to enter into a contract. Here is an actual example of concluding a contract at an auction. If the visitor raises his hand, the auctioneer takes it as an agreement to enter into a contract. We will consider this example in more detail below.

In common law, non concedit venire contra factum proprium appeared in the estoppel form. Estoppel explains the legal relationship between previous and subsequent actions if the plaintiff s previous actions confirm no pretension.

S. Bower defines estoppel as follows: where one person has made a representation of fact to another person in words or by acts or conduct, or (being under a duty to the representee to speak or act) by silence or inaction, with the intention - actual or presumptive - and with the result of inducing the representee on the faith of such representation to alter his position to his detriment, the representor, in any litigation which may afterwards take place between him and the representee, is estopped, as against the representee, from making or attempting to establish by evidence, any averment substantially at variance with his former representation, provided the representee timely and properly objects to it. Piers Feltham, Tom Leech and Daniel Hochberg, Spencer Bower the Law Relating to Estoppel by Representation (4th edn, Bloomsbury Professional 2004) ch 1.

Estoppel prohibits referring to some facts when justifying one's claims. For contracts, implied-in-fact estoppel became the basis for which a party cannot withdraw from the contract, citing a false perception of the circumstances. For example, after paying for coffee through a vending machine, a person cannot deny that they understood the meaning of their actions. This example confirms that the estoppel mechanism embodies the idea of justice.

The most plausible definition of the principle of justice is to render each his due. It is precisely due to this principle of justice that we insist on the prohibition of retracting one's words or referring to a false understanding of the circumstances. The principle of justice would be violated if we recognised that the person who ordered coffee through the vending machine did not understand that he was entering a contractual relationship. In this case, the presumption of proper understanding is applied.

When a person independently orders a coffee through a vending machine, completes the payment, chooses a drink and receives it, he is aware of the cause-and-effect relationship. As per St. Leonards, it is immaterial whether there is a misrepresentation of a fact as it existed or a misrepresentation of an intention to do or abstain from doing an act which would lead to the damage of the party whom you thereby induced to deal in marriage, or the purchase, or in anything of that sort, on the faith of that representation. See Jorden v Money [1854] UKHL J50 <https://www.bailii.org/uk/cases/UKHL/1854/J50.html> accessed 07 January 2024.

The fact of performing an action that expresses a willingness to conclude a deal is sufficient. For example, if you see an image of a cup of coffee with cream and vanilla flowers on the coffee machine, accompanied by a disclaimer in small font stating that the illustration is for informational purposes only, and you proceed to choose a drink and deposit money into the machine, you will receive a drink that is visually different from the picture. While the fact that the drink did not meet your expectations is unclear, the contractual terms are nonetheless fulfilled still fulfilled, as you have taken conclusive actions.

Here is another example to illustrate this concept: the inscription “delicious coffee” does not confirm that you will like this coffee, and the description “good price” does not guarantee the price is the lowest on the market.

Legal relations are established through action - whether making a payment, pressing a button, or getting on a bus. For instance, when you buy a computer, you enter into a sale contract. After payment and receipt of the goods, you become the computer owner. But upon opening the box, you may see an inscription, “By opening the box and removing the protective seals, you agree to the user agreement.” At this point, you can return the product and withdraw from the contract. But if you open the box (perform conclusive actions), you lose the right to prove that you did not want to use the computer and disagree with the contract terms.