Contrcat Law Implied Terms


Once a contract has been established between two parties, does not necessarily mean that its provisions are clear and beyond dispute. The parties may have differing views as to what was expressly agreed upon, and may encounter potential ambiguity and difficultly in coming to an understanding to the terms upon which they have agreed to. Furthermore, a contract may not simply consist of express terms either spoken, or in a signed written document, or in an unsigned written document. It may have been entered into against a background of custom or trade usage which the parties assumed would be implied into the contract. Therefore, the terms of a contract may be partly the result of express ...

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be bound by terms which they never agreed to. But, the idea of implying terms into a contract is well-established and serves a number of different purposes.
The courts will imply a term into a contract if they believe that the addition is necessary to make the contract truly reflect the intentions of the parties . There are various types of implied terms, ranging from an implied term argued for because the contract is simply silent about some important matter, to those implied into certain types of contracts because legislation - usually consumer protection legislation - so provides. In such cases, where certain terms are implied into particular contracts as a result of legislation, the courts are bound by the legislation and must treat the contract as containing the statutory implied term irrespective of the perceived intentions of the parties .

There are four main circumstances that give rise to implications and allow the courts to imply terms into a contract. These are ...

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into the contract. In Con-Stan Industries of Australia Pty Ltd v. Norwich Winterthur (Australia) Ltd (1986) 64 ALR 481, the court summarised the following common law rules in relation to terms implied by custom or usage :

§ The implied custom or usage is not subject to interpretation. It either exist or it does not .
§ The custom must be so well known and relied on that everyone in that business would presume the custom into the contract .
§ A term will not be implied into a contract in cases where it is contrary to the expressed terms of the contract .
§ A person may be bound by a custom of which they had no knowledge. Whether a custom or usage is read into a contract as a ...

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Added: 2/13/2007 11:03:00 PM
Category: Miscellaneous
Type: Premium Paper
Words: 2418
Pages: 9

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