Chapter 25 - § 25.3 • TYPES OF CONTRACTS

• Jurisdiction: Colorado

§ 25.3 • TYPES OF CONTRACTS

§ 25.3.1—Express Contracts/Express Agreements

An express contract is the only contract that should be consider for care services agreements because a written contract that defines the terms of payment and services is the best method for protecting the parties. An express contract is a written statement between parties that explicitly defines the intention to perform services or render a benefit in exchange for consideration. "A contract is a promise or a set of promises for the breach of which the law gives a remedy. . . . A promise may be stated in words either oral or written, or may be inferred wholly or partly from conduct."²⁰

Elements of a contract include an offer, consideration, and acceptance. Mutual promises are adequate consideration to support an enforceable contract.²¹

§ 25.3.2—Contracts Implied in Fact

Unfortunately, care service agreements are more often contracts implied in fact. A contract implied in fact is based on quantum meruit principles. "The term only means that the parties had a contract that can be seen in their conduct rather than in any explicit set of words."²² The 2010 Colorado Jury Instructions stated that four elements must prove the existence of a contract implied in fact:

1) The plaintiff rendered services to the defendant;
2) The plaintiff did so without a specific agreement as to payment, but with the reasonable expectation that he or she would be paid the reasonable value of such services;
3) The defendant requested or accepted the services expecting to pay for them or under such circumstances that he or she knew, or as reasonably should have known, that the plaintiff expected payment; and
4) The reasonable market value of the services rendered.²³

Clients should be directed to convert all care service contracts that are implied in fact into a formal written express contract. When converting the implied-in-fact contract, the terms of the agreement must be specifically defined and signed by all parties to the contract. When reforming the agreement into an express contract it is important to make reference to the retroactive beginning date of the care services agreement. However, be advised that from a Medicaid perspective, the contract becomes valid when it is an express agreement. Payments for services provided prior to the execution of the written agreement will be considered transfers without fair consideration and a penalty period of ineligibility will likely be applied.

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