Express and Implied Terms

1. What are most terms in a contract and what does this mean?

Most terms in a contract are express. This means they are explicit: the two parties have spoken them or included them in a written contract.

2. What are examples of express terms?

Examples include terms as to cost and description: these form the core of the contract and describe the principal obligations of the two parties.

2. What can terms also be as well as express terms?

However, terms can also be implied into contracts, and will be fully effective even though the parties themselves did not mention them.

3 (OIR). How many ways can terms be implied in?

There are three ways in which terms can be implied.

5 (OIR). What is the first way in which terms can be implied?「」

Firstly, by custom or industry usage (Hutton v Warren). The prior conduct of the parties may indicate terms to be implied, as shown in Hillas v Arcos.

6 (OIR). What is the second way in which terms can be implied?

Secondly, where terms are obvious.

7 (OIR). When will the courts imply a term that gives a contract business efficacy?

The courts will imply a term that gives "business efficacy" to a contract if the term is needed to make the contract work at all; the term can be described precisely; and the term passes the "officious bystander" test.

8 (OIR). What is the officious bystander test?「」

The officious bystander test, under The Moorcock, imagines a nosey, officious bystander walking past two contracting parties and asking them whether they would want to put some express term into the agreement. If the parties would instantly retort that such a term is "of course" already mutually part of the agreement then it is apt for implication (Griggs Group Ltd v Evans).

9 (OIR). What is the third way in which terms can be implied?「」

Thirdly, where the term is implied by a statute. These are terms which Parliament has decided should automatically be included in all contracts of a particular type, for example the Consumer Rights Act 2015.