Contract Law Tidbit – Implied Contract Modifications Are Supported By California Law

Implied in fact modifications have consistently been recognized under California law. If the behavior or verbal statements made by the parties to a written agreement are inconsistent or contradictory to provisions of that contact, the court has held that implied modification can reasonably be assumed. [See Diamond Woodworks, INC. v. Argonaut Ins. Co., (2003) 109 Cal. App. 4th 1020, 1038 (overruled on other grounds); see also Garrison v. Edward Brown & Sons, (1944) 25 Cal. 2d 473, 479 (“Before a contract modifying a written contract can be implied, the conduct of the parties according to the findings of the trial court must be inconsistent with the written contract so as to warrant the conclusion that the parties intended to modify the written contract.”); see also Wagner v. Glendale Adventist Medical Center, (1989) 216 Cal. App.3d 1379, 1388 (“When one party has, through oral representations and conduct or custom, subsequently behaved in a manner antithetical to one or more terms of an express written contract, he or she has induced the other party to rely on the representations and conduct or custom. In that circumstance, it would be equally inequitable to deny the relying party the benefit of the other party’s apparent modification of the written contract.”)]

Additionally, whether an implied modification actually exists is a question of fact that must be proven by a preponderance of the evidence. [See Keeble v. Brown (1954) 123 Cal. App. 2d 126, 132 (“Whether a writing has been modified by an executed oral agreement is a question of fact.”)]

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