Implied Terms
Reading
Reading: * Merkin and Saintier, Poole’s Textbook on Contract Law, 14th ed., ch.6, section 6.4, pp.221-236
See also:
McCunn, “Belize It or Not: Implied Contract Terms in Marks and Spencer plc v BNP Paribas Securities Services
Trust Company (Jersey) Limited” [2016] 79 Modern L.R. 1090
Implied Terms in the Contract
1. General issues raised by implied terms
(1) Implied terms as obligations to which party concerned did not expressly agree.
(2) Why are implied terms necessary?
Gaps may be left in the express terms of the contract deliberately or because of inadvertence. It is impossible
for the parties to foresee every contingency that may affect their agreement.
It is also costly to attempt to record in writing in advance every aspect of the agreement or to deal with
every eventuality that might affect performance.
(3) How could the implication be justified?
(a) Actual but unexpressed intention of parties at time of contracting?
(b) Inferred intention of parties (judged objectively) at time of contracting?
(c) Imposition based on considerations of reasonableness and recognised necessity
(4) Implications of traditional consent theory of contract. Note implications for freedom of contract.
(5) How far can regulatory role of contract law be taken?
The courts are generally reluctant to write or rewrite a contract for the parties. If too much is required to be
implied, the courts may instead hold agreement void for uncertainty. This may cause difficulty if the parties
have acted on the agreement.
(6) Terms can be implied by courts or by statute. Courts will imply terms by fact, by law and by custom. There
is a good deal of overlap between terms implied by fact and by law
2. Terms implied by Courts
‘Terms implied in fact’
Reading
Reading: * Merkin and Saintier, Poole’s Textbook on Contract Law, 14th ed., ch.6, section 6.4, pp.221-236
See also:
McCunn, “Belize It or Not: Implied Contract Terms in Marks and Spencer plc v BNP Paribas Securities Services
Trust Company (Jersey) Limited” [2016] 79 Modern L.R. 1090
Implied Terms in the Contract
1. General issues raised by implied terms
(1) Implied terms as obligations to which party concerned did not expressly agree.
(2) Why are implied terms necessary?
Gaps may be left in the express terms of the contract deliberately or because of inadvertence. It is impossible
for the parties to foresee every contingency that may affect their agreement.
It is also costly to attempt to record in writing in advance every aspect of the agreement or to deal with
every eventuality that might affect performance.
(3) How could the implication be justified?
(a) Actual but unexpressed intention of parties at time of contracting?
(b) Inferred intention of parties (judged objectively) at time of contracting?
(c) Imposition based on considerations of reasonableness and recognised necessity
(4) Implications of traditional consent theory of contract. Note implications for freedom of contract.
(5) How far can regulatory role of contract law be taken?
The courts are generally reluctant to write or rewrite a contract for the parties. If too much is required to be
implied, the courts may instead hold agreement void for uncertainty. This may cause difficulty if the parties
have acted on the agreement.
(6) Terms can be implied by courts or by statute. Courts will imply terms by fact, by law and by custom. There
is a good deal of overlap between terms implied by fact and by law
2. Terms implied by Courts
‘Terms implied in fact’
