Implied Terms Contract Law Notes

Implied Terms Contract Law Notes: Understanding the Importance of Implied Terms in Contracts

Contracts form the foundation of business relationships and transactions, and therefore, it is essential to have a clear understanding of the terms and conditions involved in any agreement. While some terms are explicitly mentioned in the contract, others may be implied. Implied terms are the unwritten terms that are not specifically stated in the contract but are nonetheless considered to be part of the agreement between the contracting parties.

The concept of implied terms in contract law has gained significant importance over the years. This article will provide you with a brief overview of implied terms and its significance in contract law.

What are Implied Terms?

Implied terms are the terms that are not explicitly mentioned in the contract but are nevertheless considered to be part of it. These terms are inferred from the circumstances surrounding the contract, the conduct of the parties involved, and the purpose and nature of the contract.

There are two types of implied terms – terms implied in fact and terms implied in law. Terms implied in fact are those that are inferred from the circumstances surrounding the contract. For example, if you hire a painter to paint your house, it is implied that the painter will use quality paint to complete the work.

Terms implied in law are those that are implied by the courts based on public policy or legal requirements. For example, in employment contracts, courts imply certain terms such as an obligation of mutual trust and confidence between the employer and the employee.

Why are Implied Terms Important in Contract Law?

Implied terms play a significant role in contract law as they provide a framework for interpreting the contract. They help to fill any gaps or ambiguities that may exist in the contract, making it more complete and reliable in court.

Implied terms also ensure fairness and equity in the contract between the parties involved. For example, if you purchase a product from a seller, it is implied that the product is fit for its intended purpose. This ensures that the buyer is protected from purchasing a substandard product.

Moreover, implied terms provide a level of certainty in the outcome of contractual disputes. When a dispute arises, the courts will use implied terms to interpret the contract and determine the parties` respective rights and obligations.


In conclusion, implied terms play a crucial role in contract law and are essential for the smooth functioning of business relationships and transactions. Understanding the concept of implied terms and their significance is essential for any business owner or contractor. It is therefore important to ensure that all contracts are carefully drafted to include both express and implied terms to avoid any ambiguity or misunderstanding.