Implied Contract Terms

What are ‘Implied Contract Terms’

Implied contract terms are items that a court will assume are intended to be included in a contract, even though they are not expressly stated. Businesspeople generally do not want to rely upon a court’s interpretation of implied terms, so a good contract will often be very lengthy so that as many material items as possible are written into the contract. However, when it is not possible to cover every possible detail, a lawyer may appeal that such terms were implied in order to give force to the intent of the contract.

Explaining ‘Implied Contract Terms’

Contract terms can be implied in a number of ways. For example, in many transactions involving the purchase of goods or services, there is an implied warranty of merchantability. That is, it is implied that what you are buying will serve the purpose that would be reasonably expected. This contract term is implied even when there is no written or oral contract. In other cases, contract terms may be implied where the intent of a contract obviously necessitates the inclusion of certain items. Even stating express terms to the contrary may not be sufficient to negate certain terms implied by the law.

Further Reading

  • Contract management and performance characteristics: An empirical and managerial implication for Indonesia – [PDF]
  • The perceived strength of an implied contract: Can it withstand financial temptation? – [PDF]
  • The implied market price of weather risk – [PDF]
  • The behavior of interest rates implied by the term structure of eurodollar futures – [PDF]
  • The limits of expanded choice: An analysis of the interactions between express and implied contract terms – [PDF]
  • A theory of financing constraints and firm dynamics – [PDF]
  • The economic implication of project finance arrangements for BOO/BOT power projects in Asia – [PDF]
  • The implication of using profit and loss sharing modes of finance in the banking system, with a particular reference to equity participation (partnership) method in … – [PDF]