Implied terms

• Implied Terms


  Extra terms that may be implied into a contract, in addition to the primary obligations of the parties contained in express terms
• Courts' approach to implying terms

  • Courts are generally reluctant to imply terms into a contract
  • Courts see their role as interpreting contracts rather than making them
  • The more terms implied, the more the court has created the contract rather than merely interpreting it
• Terms implied by custom

  1. Customs of a particular locality or trade

  2. Parties automatically assume contract will be subject to such customs

  3. Not dealt with specifically in the contract
• Hutton v Warren (1836) 1 M&W 466


  • Farmer had tenancy on defendant's fields
  • Claimant submitted bill for work and seed costs after tenancy terminated
  • Court implied term for compensation as it was common practice in farming tenancies
• Terms implied by courts - Intention of the Parties/Terms Implied as Fact

  1. Courts will imply a term to give effect to the obvious intentions of the parties

  2. Point at issue may have been overlooked or intention not clearly expressed

  3. Term implied in the interests of 'business efficacy' so contract makes commercial sense
• The Moorcock (1889) 14 PD 64


  • Claimant moored ship at defendant's wharf
  • Ship damaged due to uneven river bed
  • Court implied term that river bed would be safe for mooring, based on business efficacy test
• Officious bystander test


  Term must be so obvious that it goes without saying - if an officious bystander suggested it, the parties would say "Of course!"
• Spring v National Amalgamated Stevedores and Dockers Society (1956)

  • Claimant unaware of 'Bridlington Agreement' between unions
  • Court said claimant would not have understood or agreed to be bound by the agreement
• Shell (UK) Ltd v Lostock Garage Ltd (1977)

  • Court refused to imply term that Shell would not abnormally discriminate against Lostock in supplying other garages
  • Term may be reasonable but lacks sufficient certainty
• Terms implied by law

  Law imposes a model or standardised set of terms as a form of regulation in certain relationships and contracts
• Liverpool City Council v Irwin [1976] 2 All ER 39

  • Court implied term that landlord had obligation to maintain common parts of flats, even though not in tenancy agreement
• Terms implied by statute - Sale of Goods Act 1979


  Implied terms about title, sale by description, quality/fitness, sale by sample, care and skill
• Rowland v Divall (1923)

  • Seller must have right to sell goods
• Niblet v Confectioners (1921)


  • Seller did not have right to sell goods with similar label to another brand, so contract could be repudiated
• Beale v Taylor (1967)

  • Goods must correspond with description, but buyer approved car after test drive so not sold by description
• Grant v Australian Knitting Mills Ltd (1936)

  • Goods supplied must be of satisfactory quality
• Goddley v Perry (1960)


  • Retailer successful in claim against wholesaler for supplying defective goods
• Wilson v Best Travel [1993] 1 All ER 353

  • Travel agent not required to ensure accommodation conforms to British safety standards