What is the test for establishing an implied contract?

California, United States of America


The following excerpt is from Foley v. Interactive Data Corp., 254 Cal.Rptr. 211, 47 Cal.3d 654, 765 P.2d 373 (Cal. 1988):

First, defendant overemphasizes the fact that plaintiff was employed for "only" six years and nine months. Length of employment is a relevant consideration but six [765 P.2d 388] years and nine months is sufficient time for conduct to occur on which a trier of fact could find the existence of an implied contract. (Cf. Gray v. Superior Court, supra, 181 Cal.App.3d 813, 821, 226 Cal.Rptr. 570; Khanna v. Microdata Corp. (1985) 170 Cal.App.3d 250, 262, 215 Cal.Rptr. 860.) As to establishing the requisite promise, "oblique language will not, standing alone, be sufficient to establish agreement"; instead, the totality of the circumstances determines the nature of the contract. Agreement may be " 'shown by the acts and conduct of the parties, interpreted in the light of the subject matter and of the surrounding circumstances.' " (Pugh, supra, 116 Cal.App.3d at p. 329, 171 Cal.Rptr. 917.) Plaintiff here alleged repeated oral assurances of job security and consistent promotions, salary increases and bonuses during the term of his employment contributing to his reasonable expectation that he would not be discharged except for good cause.

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