Co-Founder of SoloSuit
George Simons, JD/MBA

George Simons is the co-founder and CEO of SoloSuit. He has helped Americans protect over $1 billion from predatory debt lawsuits. George graduated from BYU Law school in 2020 with a JD-MBA. In his spare time, George likes to cook, because he likes to eat.

Edited by Hannah Locklear

Editor at SoloSuit
Hannah Locklear, BA

Hannah Locklear is SoloSuit’s Marketing and Impact Manager. With an educational background in Linguistics, Spanish, and International Development from Brigham Young University, Hannah has also worked as a legal support specialist for several years.

Not all contract come in writing. Some are just implied.

Summary: An implied contract is a non-verbal and unwritten legal agreement. Here is SoloSuit's guide on implied contracts and how they differ from express contracts.

In debt collection lingo, an implied contract is a term used to describe the existence of a relationship between a creditor and a debtor. Debt collection laws vary from state to state. For example, in some states, creditors do not need to prove the existence of an express contract between them and debtors. Instead, implied contracts may be all that's required to prove the existence of the relationship.

What are some examples of implied contracts?

Every day, millions of people unknowingly enter into implied contracts with each other. For example, when you walk into a restaurant and order food, that's an implied contract. Here's why:

You expect the restaurant to serve the food because that's what they do. After consuming the food, the restaurant expects you to pay for it because that's how they make money. You don't need a written contract between you and the restaurant owner or server before ordering or serving food.

The same applies when you visit a barbershop or hair salon and sit on a chair expecting to be served. You expect the barbers or hairdressers to fix your hair. In return, they expect you to pay for the services rendered. That's an implied contract.

The list of examples is endless.

What is an express contract?

An express contract is a legally-binding agreement where both parties agree to the terms of the contract either orally, in writing or a combination of both. An express contract is more like the opposite of an implied contract. For example, if you borrow money from a creditor and they ask you to sign a contract stating that you agree to pay the amount owed within a particular time frame, this could be a case of an express contract.

As expected, an express contract is usually much easier to prove. All the other party needs is a copy of the written or recorded agreement.

However, when suing an individual or entity over failure to repay a particular debt, the plaintiff might present an Account Stated as an implied contract between the two parties. An Account Stated summarizes the amount of money a debtor owes the creditor.

This statement may include transactions the debtor made with the account, and it may be enough to prove the existence of a financial relationship between two parties.

Account Stated is commonly used in transactions that involve frequent billing between creditors and debtors. Rather than creating a written contract for each transaction, the Account Stated is used to prove the financial relationship between the two parties.

Is the “Account Stated” an implied contract?

An Account Stated is usually considered an implied contract since it establishes a relationship between the two parties even in the absence of an express contract. For example, if you use the credit card issued by a credit card company to pay your bills, the creditor could use the Account Stated to prove the existence of a financial relationship between the two parties.

Can creditors sue you for failing to honor an implied contract?

Creditors can sue you for failing to honor an implied contract in most states. However, such lawsuits are time-barred by what is commonly referred to as the statute of limitations.

The statute of limitations is the time one party has to seek legal action against the other. For instance, in Washington, debt collection lawsuits involving failure to honor implied contracts have a three-year statute of limitations. Once the statute of limitations has expired, the other party cannot file a lawsuit to recover the amount owed.

It's also important to note that ignoring a lawsuit is not always a good idea, even though debt collection laws vary from state to state. When a creditor or debt collection company brings such a lawsuit against you, you'll be served with the Summons and Complaint documents. The Summons is a document that officially notifies you of the lawsuit filed against you. On the other hand, the Complaint contains the list of allegations being made against you. These two documents may have different names depending on your state. For example, in Texas, the Complaint is called a Petition.

Do not ignore a debt collection lawsuit

Whether correct or not, you shouldn't ignore these two documents. This is because the court considers silence as an admission of guilt. When served with a debt lawsuit, you have up to 35 days to respond, depending on which state you live in.. The deadline to respond varies from state to state, but the earlier, the better. Failure to respond could lead to a default judgment against you. A default judgment grants the other party legal authority to pursue other acceptable means to recover the debt. Wage garnishment is a good example of one of the many methods a debt collector or creditor might pursue to recover the debt.

The most unfortunate thing about not responding to a debt collection lawsuit is that sometimes, you may be sued over debt you don't even owe. This could be a case of stolen identity, mistaken identity, poor bookkeeping, or anything in between. Not responding to the lawsuit denies you the right to defend yourself or request proof that you actually owe the debt in question.

Respond to a debt collection lawsuit

The exact procedures for responding to a debt collection lawsuit vary from one state to another. Here's a comprehensive 50-state guide on how to answer a Summons for Debt Collection, including the deadlines for filing your Answer. Generally, you can follow these three steps to respond to a debt collection lawsuit—and win:

Answer each claim listed in the Complaint document. When you're sued for a debt, you should receive a Summons and Complaint document notifying you of the lawsuit. In your Answer, the most important thing to do is respond to each claim listed in the Complaint document. You can admit, deny, or deny due to lack of knowledge. Keep in mind that most attorneys recommend denying as many claims as possible, which forces the collector to prove the claims. If they can't prove everything, they might just drop the case altogether.
Assert your affirmative defenses. An affirmative defense is any legal reason that the debt collector shouldn't win the case. You can bring up several affirmative defenses in your Answer, but if you don't assert them in your initial response to the lawsuit, you can't bring them up later on in the case. This is why it's so important to include your affirmative defenses in your Answer. For example, the statute of limitations is a common affirmative defense used in debt collection lawsuits.
File your Answer with the court, and send a copy to party suing you. You have 14-35 days to file the Answer before a default judgment will be entered against you. If this happens, debt collectors can garnish your wages and put liens on your properties. You can send the Answer to the court via mail, drop it off in person, or file it electronically (this option is only available in some courts). After you've filed the Answer in court, make a copy and send it to the debt collector's attorney, whose information is listed on the Summons document. Make sure to request a return receipt, so you have proof that you sent it.

To learn more about these three steps, check out this video:

What is SoloSuit?

SoloSuit makes it easy to fight debt collectors.

You can use SoloSuit to respond to a debt lawsuit, to send letters to collectors, and even to settle a debt.

SoloSuit's Answer service is a step-by-step web-app that asks you all the necessary questions to complete your Answer. Upon completion, we'll have an attorney review your document and we'll file it for you.

Respond with SoloSuit

"First time getting sued by a debt collector and I was searching all over YouTube and ran across SoloSuit, so I decided to buy their services with their attorney reviewed documentation which cost extra but it was well worth it! SoloSuit sent the documentation to the parties and to the court which saved me time from having to go to court and in a few weeks the case got dismissed!" – James

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