Terms of a Contract

Topics: Contract / Pages: 14 (3263 words) / Published: Nov 29th, 2010
1. Express and Implied Terms
The content of a contract are made up of terms (or ‘clauses’ as they are called in the case of written contracts) which may be express or implied. The express terms are the terms which the parties actually stipulated for themselves when making the contract, whether orally or in writing.
In addition to the express terms, the courts sometimes, for a variety of reasons, imply certain terms into the contract. Implied terms are terms that are not expressly stated in the contract but are deemed to be included in the contract. The most obvious reason is that the implied terms are required by a statute. Examples of statutes requiring certain terms to be implied into particular types of contracts are the Sale of Goods Act 1957, the Hire-Purchase Act 1967 and the National Land Code.
Another reason is that sometimes the court finds it necessary to import a particular trade custom or usage into a contract, if it is satisfied that both parties were aware of it and must have intended that trade custom or usage to apply in their contract. This is less likely to happen nowadays, because most customs have been absorbed into statute (e.g. the Sale of Goods Act).
A more likely reason is that the court finds it necessary to imply a term into a contract simply to make it workable, or, in legal language. ‘to give business efficacy’ to it. This will only involve those terms that the parties must have taken for granted.

The Moorcock [1889]
The owners of a wharf agreed that a ship should be moored alongside to unload its cargo. It was well known that at low water the ship would ground on the mud at the bottom. At ebb tide, the ship settled on a ridge concealed beneath the mud and suffered damage.
The court held that there was an implied term that the ground alongside the wharf was safe at low tide since both parties knew that the ship must rest on it.

Terms may also be implied from previous dealings between the parties concerned.

Hillas & Co

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