Present: All the Justices

SPECTRA-4, LLP, ET AL.
                                           OPINION BY
v.   Record No. 140892            JUSTICE LEROY F. MILLETTE, JR.
                                          June 4, 2015
UNIWEST COMMERCIAL REALTY, INC.


             FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
                     Michael F. Devine, Judge

      In this appeal we determine to what extent implied-in-fact

contracts encompass the terms of previously expired express

contracts that were not executed by the parties to the implied-

in-fact contracts.

                     I.   FACTS AND PROCEEDINGS

      Spectra-4 LLP and Spectet Limited Partnership, LLP are

limited liability partnerships that individually own and lease

neighboring commercial buildings in Reston, Virginia.   This

appeal arises out of a dispute over the management services

provided for the commercial buildings.

1.    History Of Management Services

      Relevant to this appeal, three separate entities have

provided the management services for the commercial buildings.

      First, Jefferson/LBG, L.L.C. managed the commercial

buildings from 1995 to 1997.   Jefferson/LBG was organized in

August 1995 and was owned in part by Suzanne O. Farr.

Jefferson/LBG's management services were governed by two

separate but materially identical Management Agreements, one
for each commercial building.   Spectra-4 and Jefferson/LBG

executed the Management Agreement pertaining to the commercial

building owned by Spectra-4, and Spectet and Jefferson/LBG

executed the Management Agreement pertaining to the commercial

building owned by Spectet.   The corporate existence of

Jefferson/LBG was automatically cancelled by the Virginia State

Corporation Commission in December 1997 when it failed to pay

its annual registration fee.

     Second, Jefferson Commercial Real Estate Services, Inc.

managed the commercial buildings from 1998 to 1999.   Farr was

also an owner of Jefferson Commercial, but despite their

similar titles, Jefferson Commercial was a separate entity

legally distinct from Jefferson/LBG.   No new Management

Agreements were executed to govern Jefferson Commercial's

management services for the commercial buildings.   Also,

Jefferson Commercial did not transact any business with

Jefferson/LBG.

     Third, Uniwest Commercial Realty, Inc. managed the

commercial buildings from 2000 until 2012.   No new Management

Agreements were executed to govern Uniwest's management

services for the commercial buildings.   Also, Uniwest did not

transact any business with Jefferson/LBG.    However, Uniwest did

transact business with Jefferson Commercial.   Uniwest and

Jefferson Commercial executed an Asset Purchase Agreement in


                                2
November 1999 in which Jefferson Commercial sold all of its

assets, but no stock, to Uniwest.

2.   Uniwest's Tenure In Providing Management Services

     Jefferson Commercial notified Spectra-4 and Spectet that

it added Uniwest "as partners" to its management services

effective January 2000.   At that time, Farr became Uniwest's

president.   Later, in 2002, Uniwest fired Farr from this

position.    Despite this change, Uniwest continued to provide

management services for the commercial buildings until 2012.

     In September 2012, Spectra-4 and Spectet notified Uniwest

that they sought to "terminate[] the [M]anagement

[A]greement[s] between Uniwest and [Spectra-4 and Spectet]."

Uniwest responded that the termination was "invalid per the

terms of the [Management] Agreement[s]," and stated that it

would continue its management services until certain specified

dates.   Legal counsel then became involved, and after a series

of letters sent back and forth, Uniwest's management services

for both commercial buildings were terminated in October 2012.

Following the termination of its management services, Uniwest

withdrew $13,847.61 in premature termination fees from Spectra-

4's operating accounts, and $22,605.72 in premature termination

fees and $1,751.30 in copying costs from Spectet's operating

accounts.




                                 3
     Uniwest withdrew these funds because it believed that it

was entitled to such fees and costs upon what Uniwest

considered to be Spectra-4's and Spectet's premature

termination of Uniwest's management services.   Uniwest's

position was predicated upon its belief that the Management

Agreements themselves dictated the contractual relationships

between Spectra-4 and Uniwest, and between Spectet and Uniwest;

or, alternatively, that the contractual relationships between

the parties had incorporated the full terms of the Management

Agreements.   In contrast, Spectra-4 and Spectet believed that

Uniwest's withdrawal of such fees and costs was impermissible.

Spectra-4's and Spectet's position was predicated upon the

belief that the Management Agreements did not govern Uniwest's

management services; and that even if the Management Agreements

did govern, Spectra-4 and Spectet had complied with the "just

cause" termination clause of those agreements in terminating

Uniwest's management services.

3.   Judicial Proceedings

     Upon learning that Uniwest had withdrawn additional fees

and costs, Spectra-4 and Spectet filed separate Warrants in

Debt against Uniwest in the General District Court of Fairfax

County, alleging conversion.   The cases were not consolidated,

but a single trial was held and the district court awarded

judgment in favor of Spectra-4 and Spectet.


                                 4
     Uniwest timely appealed to the Circuit Court of Fairfax

County, and Spectra-4 and Spectet amended the complaints to

include breach of contract claims.    Once again, the cases were

not consolidated but a single trial was held.    After a bench

trial the circuit court requested additional briefing on

Uniwest's renewed motion to strike.   Upon considering the

parties' arguments and briefs, the circuit court entered

judgment in favor of Uniwest and dismissed Spectra-4's and

Spectet's claims with prejudice.

     Spectra-4 and Spectet timely appealed to this Court.

                         II.   DISCUSSION

     Although we granted three assignments of error, we need

only address the first assignment because our determination of

the terms of the implied-in-fact contracts governing the

parties' relationships resolves this appeal. 1   Jimenez v. Corr,

288 Va. 395, 404, 764 S.E.2d 115, 118 (2014).




     1
       Assignment of error 2 pertained to whether Spectra-4 and
Spectet waived their right to terminate management services
under the Management Agreements' "just cause" termination
clause.
     Assignment of error 3 pertained to whether Spectra-4 and
Spectet could waive any portion of the Management Agreements by
conduct, rather than by writing, despite the waiver-only-in-
writing clause in the Management Agreements.

                                 5
        Assignment of error 1 reads:

        1.   The trial court erred in holding that the
        implied-in-fact contracts between [Spectet and
        Spectra-4] and [Uniwest] "effectively incorporated the
        terms of the [Management Agreements]" and, thus, that
        [Uniwest] did not breach the implied-in-fact contracts
        by taking liquidated damages from [Spectet and
        Spectra-4] equal to six months' management fees and
        charging [Spectet] for copy costs.

A.      Standard Of Review

        "The question of whether [a valid] contract exists is a

pure question of law, to which we apply a de novo standard of

review."    Mission Residential, LLC v. Triple Net Props., LLC,

275 Va. 157, 161, 654 S.E.2d 888, 890 (2008).     Similarly, we

review de novo the purely legal issues of what the terms of a

contract are, and how those terms apply to the facts of the

case.     See Doctors Co. v. Women's Healthcare Assocs., 285 Va.

566, 571, 740 S.E.2d 523, 525 (2013).

B.      The Contractual Agreements Governing Uniwest's Management
        Services For The Commercial Buildings

        Parties may agree to an express contract, whether orally

or written, to govern their course of dealing.     See Virginia

Iron, Coal & Coke Co. v. Odle, 128 Va. 280, 285, 105 S.E. 107,

108 (1920).    In the absence of an express contract, an implied

contract may exist.     City of Norfolk v. Norfolk Cnty., 120 Va.

356, 363, 91 S.E. 820, 822 (1917).     Two types of implied

contracts are recognized in Virginia:     implied-in-fact

contracts and implied-in-law contracts.     Id.   Implied-in-fact


                                  6
contracts are no different from express contracts except that,

instead of "all of the terms and conditions [being] expressed

between the parties, . . . some of the terms and conditions are

implied in law from the conduct of the parties."    Hendrickson

v. Meredith, 161 Va. 193, 200, 170 S.E. 602, 605 (1933).

Implied-in-law contracts, or "quasi contracts," establish

liability "from an implication of law that arises from the

facts and circumstances, independent of agreement or presumed

intention."   Id.   "In such cases, the promise is implied from

the consideration received, [and] the legal duty imposed upon

the defendant defines the contract."    Id. 2

1.   Express Contracts

     The circuit court concluded that the Management Agreements

– the express contracts executed by Spectra-4 and

Jefferson/LBG, and by Spectet and Jefferson/LBG – did not

govern the relationship between Spectra-4 and Uniwest, and

between Spectet and Uniwest.   On appeal, Uniwest argues that it

succeeded to the Management Agreements, or that the Management

Agreements were assigned to it, and thus the express contracts


     2
       An implied-in-law contract governing the subject matter
at hand does not exist between Spectra-4 and Uniwest, and
between Spectet and Uniwest, because as set forth below
implied-in-fact contracts exist between these sets of parties.
City of Norfolk, 120 Va. at 374, 91 S.E. at 825 ("The fiction
of an [implied-in-law contract] will not be indulged in every
case, but only where, in equity and good conscience, the duty
to make such a promise exists.").

                                 7
set forth in the Management Agreements directly governed

Uniwest's management services.   We disagree.

     The circuit court concluded that the Management Agreements

were cancelled when the State Corporation Commission

automatically cancelled the corporate existence of

Jefferson/LBG.   See Moore v. Crutchfield, 136 Va. 20, 25, 116

S.E. 482, 483 (1923); Lucas v. Pittsburgh Life & Trust Co., 137

Va. 255, 271, 119 S.E. 109, 114 (1923); see also Martin v. Star

Publishing Co., 126 A.2d 238, 243 (Del. 1956); Solomon v.

Greenblatt, 812 S.W.2d 7, 17 (Tex. Ct. App. 1991); Wyoming-

Indiana Oil & Gas Co. v. Weston, 7 P.2d 206, 209-10 (Wyo.

1932).   We need not decide whether that holding was correct

because, regardless of the status of the rights and obligations

under the Management Agreements as entered into by Spectra-4,

Spectet, and Jefferson/LBG, those rights and obligations were

never extended to either Jefferson Commercial or Uniwest.

     Neither Jefferson Commercial nor Uniwest succeeded to or

were assigned any rights and obligations created under the

Management Agreements.   See Layne v. Henderson, 232 Va. 332,

338, 351 S.E.2d 18, 22 (1986) (providing the plain meaning of

"successor" in a contract); J. Maury Dove Co. v. New River Coal

Co., 150 Va. 796, 827, 143 S.E. 317, 327 (1928) (setting forth

the general rule of how a contractual obligation may be

assigned).   Jefferson Commercial and Uniwest were not parties


                                 8
to the Management Agreements, are entities legally distinct

from Jefferson/LBG, did not merge with Jefferson/LBG, acquired

no stock and no assets from Jefferson/LBG, and entered into no

contracts with Jefferson/LBG.   Simply put, Jefferson Commercial

and Uniwest were strangers to the Management Agreements when

those express contracts were executed, and remained strangers

to the Management Agreements even as Jefferson Commercial and

Uniwest provided management services for the commercial

buildings.   And although an asset purchase agreement was

executed between Jefferson Commercial and Uniwest, Jefferson

Commercial could not sell the Management Agreements to Uniwest

because Jefferson Commercial never acquired an interest in

those express contracts. 3




     3
       These facts also establish why, contrary to Uniwest's
arguments to the circuit court, this appeal does not implicate
ratification or acceptance by performance.
     "Ratification is an adoption of a contract made on [a
party's] behalf by [a third person] whom [the party] did not
authorize, which relates back to the execution of the contract
and renders it obligatory from the outset." Reid v. Field, 83
Va. 26, 33, 1 S.E. 395, 399-400 (1887). Jefferson/LBG did not
execute the Management Agreements on Uniwest's behalf. Uniwest
could not ratify contracts not entered into on its behalf.
     The doctrine of acceptance by performance stands for the
proposition that "[t]he absence of an authorized signature does
not defeat the existence of the contract" if a party's conduct
denotes acceptance of an offer. Galloway Corp. v. S.B. Ballard
Constr. Co., 250 Va. 493, 505, 464 S.E.2d 349, 356 (1995). As
related to the Management Agreements, Spectra-4's and Spectet's
offers were directed to Jefferson/LBG. Uniwest could not
accept – by writing or performance – an offer never made to it.

                                9
     Thus, the Management Agreements were express contracts

that governed only the relationship between Spectra-4 and

Jefferson/LBG, and between Spectet and Jefferson/LBG.     The

circuit court did not err in holding that the Management

Agreements did not directly govern Uniwest's management

services.

2.   Implied-In-Fact Contracts

     In the absence of an express contract between the parties

governing a particular subject matter, an implied contract may

exist.   County of Campbell v. Howard, 133 Va. 19, 54-55, 112

S.E. 876, 886 (1922); Ellis & Myers Lumber Co. v. Hubbard, 123

Va. 481, 502, 96 S.E. 754, 760 (1918).     Like an express

contract, an implied-in-fact contract is created only when the

typical requirements to form a contract are present, such as

consideration and mutuality of assent.      City of Norfolk, 120

Va. at 361-62, 91 S.E. at 821-22.      However, an implied-in-fact

contract "is arrived at by a consideration of [the parties']

acts and conduct."     Id. at 362, 91 S.E. at 821.

a.   Existence Of The Implied-In-Fact Contracts

     The circuit court concluded that, between Spectra-4 and

Uniwest, and between Spectet and Uniwest, implied-in-fact

contracts governed Uniwest's management services for each

commercial building.    This was not error.




                                  10
     The record reflects that, even though no oral or written

agreement was executed between the parties, Uniwest provided

Spectra-4 and Spectet management services for approximately

twelve years.   For each commercial building, Uniwest provided a

building manager, collected rent from tenants, addressed

problems raised by tenants, oversaw building maintenance and

engineering, and maintained an operating account from which it

withdrew operating costs and paid itself a monthly fee for its

services.   These actions establish that an implied-in-fact

contract existed between Spectra-4 and Uniwest, and between

Spectet and Uniwest, and that those implied-in-fact contracts

governed Uniwest's management services.

b.   Terms Of The Implied-In-Fact Contracts

     The circuit court concluded that these implied-in-fact

contracts "effectively incorporated" the previously expired,

expressly created Management Agreements in their entirety for

purposes of the implied-in-fact contracts' terms and

conditions.   This was error.

     The threshold error in the circuit court's reasoning was

the court's determination that mutuality of assent existed in

light of its factual finding that Spectra-4, Spectet, and

Uniwest held the "subjective belief" that they were operating

under the entirety of the Management Agreements.   A meeting of

the minds cannot exist simply because the parties independently


                                11
believe the exact same thing.   Instead, mutuality of assent

exists by an interaction between the parties, in the form of

offer and acceptance, manifesting "by word, act[,] or conduct

which evince the intention of the parties to contract."       Green

v. Smith, 146 Va. 442, 452, 131 S.E. 846, 848 (1926).       In other

words, the parties' belief of what the agreement is must

coincide with written or spoken words, if an express contract

is to be formed; or must coincide with the parties' conduct, if

an implied-in-fact contract is to be formed.    Id.; see also

Joseph M. Perillo, 1 Corbin on Contracts § 1.19, at 55-58 (rev.

ed. 1993) (making the point that the only difference between an

express and implied-in-fact contract is the manner in which

mutuality of assent is established).

     Accepting that belief must exist in tandem with words or

actions is only a starting point.    With implied-in-fact

contracts, the parties' conduct must also establish what the

terms of the contract are.   See Hendrickson, 161 Va. at 200,

170 S.E. at 605; City of Norfolk, 120 Va. at 361-62, 91 S.E. at

821-22.   In limited circumstances, an implied-in-fact contract

may encompass the totality of an express contract simply by way

of the parties acting in a manner consistent with such an

express contract.   But it is only when the parties to an

express contract continue to act as if that contract is still

operative even after it expires that the entirety of "the


                                12
material terms of the prior contract . . . survive intact" by

way of a subsequently formed implied-in-fact contract.       Luden's

Inc. v. Local Union No. 6 of the Bakery, Confectionery &

Tobacco Workers Int'l Union, 28 F.3d 347, 355-56 (3d Cir.

1994).

     Importantly, the logic recognized in Luden's Inc. applies

only to those specific circumstances:       when the same parties

are engaged in the same course of dealing both during and after

the expiration of the express contract.       Absent such

circumstances, an implied-in-fact contract may include only the

particular terms of a previously expired express contract which

the parties' subsequent actions, embodying their mutuality of

assent, specifically encompass.        See Green, 146 Va. at 452, 131

S.E. at 848; City of Norfolk, 120 Va. at 361-62, 91 S.E. at

821-22.

     The logic of Luden's Inc. does not apply to the factual

circumstances of this case.   The previously expired express

contracts in the form of the Management Agreements were between

Spectra-4, Spectet, and Jefferson/LBG.       The implied-in-fact

contracts were between Spectra-4, Spectet, and Uniwest.

Jefferson/LBG and Uniwest are legally distinct parties.

Consequently, Spectra-4, Spectet, and Uniwest could not simply

act consistent with the Management Agreements in order for

their implied-in-fact contracts to include the full terms of


                                  13
the Management Agreements.   The implied-in-fact contracts

included only the specific terms of the Management Agreements

encompassed by the parties' conduct.

     Thus, on the present record no basis existed for the

circuit court to hold that the implied-in-fact contracts

permitted Uniwest to withdraw $13,847.61 in premature

termination fees from Spectra-4's operating accounts, and

$22,605.72 in premature termination fees and $1,751.30 in

copying costs from Spectet's operating accounts.   The record

demonstrates that the implied-in-fact contracts incorporated

only some provisions of the Management Agreements.   For

example, evidence at trial established that Spectra-4 and

Spectet not only permitted Uniwest to calculate their

management fees in a manner consistent with the Management

Agreements, but that the parties specifically referenced and

relied upon Article 17.3 of the Management Agreements in order

to recalculate Uniwest's management fees.   Thus, the implied-

in-fact contracts encompassed, among other terms, the terms and

conditions of the Management Agreements relating to the

calculation of the management fees.

     However, no evidence established that Spectra-4, Spectet,

and Uniwest engaged in conduct supporting the conclusion that

the implied-in-fact contracts encompassed those terms and

conditions of the Management Agreements governing premature


                                14
termination fees.   The Management Agreements' liquidation

clause was the only basis for Uniwest withdrawing premature

termination fees from Spectra-4's and Spectet's operating

accounts.   At most, evidence showed that Uniwest actually

withdrew premature termination fees upon the termination of

Uniwest's management services.    But as the circuit court

recognized, "the parties only terminated [the implied-in-fact

contracts] once.    And there[ is] no pattern of conduct of

termination."   Further, Spectra-4 and Spectet did not acquiesce

to Uniwest's withdrawal of funds, but consistently disputed it.

Thus, on this record no conduct established a mutuality of

assent that the implied-in-fact contracts encompassed the

Management Agreements' liquidation clause.    Accordingly,

Uniwest's withdrawal of $13,847.61 was not authorized by the

implied-in-fact contract between Spectra-4 and Uniwest, and

Uniwest's withdrawal of $22,605.72 was not authorized by the

implied-in-fact contract between Spectet and Uniwest.

     Additionally, no evidence established that Spectra-4,

Spectet, and Uniwest engaged in conduct so that the implied-in-

fact contracts encompassed terms and conditions permitting

Uniwest to charge for copying costs.    Uniwest's Chief Financial

Officer testified at trial that it withdrew $1,751.30 in

copying costs from Spectet's operating accounts not based on

the Management Agreements, but based only on "standard


                                 15
procedure."   Also, the Management Agreements themselves

permitted the "Agent" to "pay or reimburse itself for all

expenses and costs of operating the Project."    However,

Uniwest's Chief Financial Officer further testified that, while

Uniwest would occasionally bill for "FedEx charges or something

like that," she could not recall Uniwest ever charging Spectra-

4 or Spectet for copying costs.    No other evidence was

introduced pertaining to Uniwest's history of charging for

copying costs.    Thus, on this record no conduct established a

mutuality of assent that the implied-in-fact contracts

encompassed a term allowing Uniwest to charge copying costs.

Accordingly, Uniwest's withdrawal of $1,751.30 was not

authorized by the implied-in-fact contract between Spectet and

Uniwest.

                          III. CONCLUSION

     Uniwest provided management services for the commercial

buildings owned by Spectra-4 and Spectet.    As between Uniwest

and Spectra-4, and between Uniwest and Spectet, two separate

implied-in-fact contracts existed.     These implied-in-fact

contracts could, and did, encompass specific portions of

previously expired express contracts executed by a different

set of parties.   However, these implied-in-fact contracts did

not include terms and conditions permitting Uniwest to withdraw




                                  16
premature termination fees or copying charges from Spectra-4's

and Spectet's operating accounts.

     We therefore reverse the circuit court's judgment that the

implied-in-fact contracts permitted Uniwest's withdrawal of

premature termination fees and copying charges from Spectra-4's

and Spectet's operating accounts.   We vacate the circuit

court's order dismissing Spectra-4's and Spectet's claims with

prejudice and entering judgment in favor of Uniwest.   As

Spectra-4 and Spectet have requested remand so that the circuit

court may enter appropriate judgments, we remand this appeal to

the circuit court for further proceedings consistent with this

opinion.

                                           Reversed and remanded.




                               17
