IMPLIED TERMS Meaning and
Definition
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Implied terms refer to the principles or conditions that are not expressly stated or written in a contract but are deemed to be a part of it nonetheless. These terms are typically assumed to be intended by the parties involved, and their inclusion is necessary for the contract to be fair and effective. Implied terms can be categorized into two main types: terms implied by law and terms implied by fact.
Terms implied by law are those that are automatically added to contracts of a specific nature, regardless of whether or not the parties explicitly agreed on them. These terms are based on legal statutes, common law principles, or industry customs. Examples of terms implied by law include the implied duty of good faith, meaning that parties must act honestly and fairly towards each other, and the statutory implied term that products should be of satisfactory quality and fit for purpose.
Terms implied by fact, on the other hand, are those that are inferred based on the specific circumstances surrounding the contract. They are not universal and can vary from case to case. These terms are usually included because they are necessary to give business efficacy to the agreement or reflect the presumed intentions of the parties. For instance, a term might be implied when it is so obvious it goes without saying, or when the parties have consistently conducted business in a certain way.
Overall, implied terms play a crucial role in clarifying contractual obligations and maintaining fairness, even if not explicitly stated in the contract itself.
Etymology of IMPLIED TERMS
The term "implied terms" comes from the combination of two distinct linguistic origins.
The word "implied" can be traced back to the Latin word "implēre", which means "to fold, entwine, or fill up". Over time, the term evolved in English to refer to something that is suggested, understood, or known without being explicitly stated or expressed.
The word "terms" has its roots in the Old English term "terma", which refers to a boundary or limit. It also stems from the Latin word "terminus", meaning "boundary" or "end".
When these two terms are combined, "implied terms" refers to the terms or conditions that are not explicitly stated in a contract or agreement but are nonetheless understood to be part of it. These terms are inferred by law or custom and are considered to be legally binding.
