Contract interpretation—express terms in contracts
Contract interpretation—express terms in contracts

The following Dispute Resolution guidance note provides comprehensive and up to date legal information covering:

  • Contract interpretation—express terms in contracts
  • Express and implied contractual terms distinguished
  • Issues with express contractual terms
  • Have express terms been incorporated in the contract?
  • 'Referential incorporation'—can the terms of one agreement be incorporated into another?
  • Incorporating pre-contractual statements as express contractual terms?
  • How are express contractual terms interpreted?

Express and implied contractual terms distinguished

Contractual terms may be either express or implied:

  1. express terms—are terms which are actually recorded in a written contract or openly expressed in an oral contract at the time the contract is made (or there may be a combination of written and oral express terms)

  2. implied terms—are not stated in the contract but arise 'by implication' to reflect the intention of the parties at the time the contract was made. Terms may be implied by fact, law or custom

For guidance on implying terms into contracts, see Practice Notes:

  1. Contract interpretation—terms implied by fact

  2. Contract interpretation—terms implied by law

  3. Contract interpretation—terms implied by custom and usage

Issues with express contractual terms

Where terms are expressly agreed, issues can arise as to:

  1. incorporation—what has been incorporated as an express term of the agreement, and

  2. construction or interpretation—what the incorporated terms mean

Where statements are made in the course of negotiations, but not effectively incorporated as express terms of the agreement, consideration should also be given as to whether such statements are misrepresentations (see Practice Note: Pre-contractual representations and statements) or collateral contracts (see Practice Note: Contract interpretation—when is a statement a representation or a contractual term?—If not a contractual term is the representation enforceable as a collateral contract?).

Have express terms been incorporated