Implied Terms In a Contract

implied terms

Following on my earlier blog today about some of the principles of contract law,  is whether or not there is an implied term in the contract even though it may not be actually stated.


For example it is usually  implied when you purchase a car that it is in driveable condition unless it is expressly sold as un driveable.


The following statement of the law on implied terms in a contract is well settled:

[14] A succinct restatement of the principles to be applied by
the courts in implying terms to agreements appears in the
reasons of Lambert J.A. in London Drugs Ltd. v. Kuehne & Nagel
Int. Ltd. (1990) 45 B.C.L.R. (2d) 1 at page 64, quoting a
passage from the reasons of Lord Simon in B. P. Refinery
(Westernport) Pty. Ltd. v. Shire of Hastings (1977) 16 A.L.R.
363 (P.C.) at page 376:
. . .

” for a term to be implied, the following
conditions (which may overlap) must be satisfied:

(1)it must be reasonable and equitable;

(2) it must be necessary to give business efficacy to the contractso that no term will be implied if the contract is
effective without it;

(3) it must be so obvious that “it goes without saying”;

(4) it must be capable of clear expression;

(5) it must not contradict any expressed term of the contract.


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