When Can Terms be Implied into a Contract?
Contracts are legal agreements that are meant to govern the relationship between two or more parties. They come in many forms, including employment contracts, purchase agreements, and lease agreements, among others. One important aspect of contracts is that they are based on the principle that all of the terms of the agreement are explicitly stated. However, there are instances where terms can be implied into a contract. In this article, we will explore the circumstances under which terms can be implied into a contract.
What is an Implied Term?
An implied term is a term that is not expressed in the contract but is considered to be part of the agreement between the parties. It is an understanding that the parties did not express but is deemed to be necessary for the performance of the contract. Implied terms are not written or spoken agreements but are instead inferred from the language, context, and conduct of the parties.
When Can Terms be Implied into a Contract?
There are three main ways in which terms can be implied into a contract. These include:
1. Custom
Custom refers to the established practice or behavior of a particular trade or industry. If it is customary for a particular term to be included in contracts of a particular trade or industry, it may be considered an implied term in any contract within that trade or industry. For example, it is customary in the construction industry that contractors will work within a specified period to complete a project. If a contract is silent on this issue, it can be inferred that this is the expectation of the parties.
2. The Intention of the Parties
The intention of the parties can also be used to imply terms into a contract. The courts will examine the circumstances surrounding the formation of the contract and the parties` conduct to determine what the parties intended. For example, if a contractor agrees to provide services to a client, it can be inferred that the contractor would use its best efforts to complete the project within the agreed timeline.
3. Statute
Finally, terms can be implied into a contract by statute. In some cases, the law requires certain terms to be included in a contract. For example, employment contracts may be subject to statutory provisions that require employers to provide a safe working environment, pay minimum wage, or offer a certain level of benefits.
Conclusion
In conclusion, while contracts are typically based on the principle that all of the terms of the agreement are explicitly stated, there are instances where terms can be implied into a contract. These terms can be implied through custom, the intention of the parties, or statute. It is important to note that terms can only be implied when it is necessary for the performance of the contract. Therefore, parties should carefully consider the terms of the agreement to ensure that all necessary terms are included explicitly to avoid any disputes that may arise in the future.