Contract interpretation—terms implied by fact
Contract interpretation—terms implied by fact

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

  • Contract interpretation—terms implied by fact
  • Express and implied contractual terms distinguished
  • How might terms be implied into a contract (the implication of contractual terms)?
  • Contractual terms implied by fact—the court's approach: clarification by the Supreme Court in Marks and Spencer
  • Where does this leave Lord Hoffmann's test set out in Belize?
  • Guidelines to implication by fact—pre-Supreme Court decision in Marks and Spencer
  • Implied terms—decisions subsequent to Marks and Spencer

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. For further guidance on express terms, see Practice Note: Contract interpretation—express terms in contracts

  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

This Practice Note considers those terms implied by fact.

For guidance on terms implied by law, see Practice Note: Contract interpretation—terms implied by law.

For guidance on those terms implied by custom and usage, see Practice Note: Contract interpretation—terms implied by custom and usage.

How might terms be implied into a contract (the implication of contractual terms)?

Terms may be implied into a contract in three ways by:

  1. fact

  2. law

  3. custom

For specific guidance on the incorporation of specific types of implied term and in specific industries, see Practice Notes:

  1. Good faith in commercial agreements

  2. Implied terms in contracts for goods and services

  3. Implied terms in construction contracts

  4. Types of contractual term in employment

  5. The term of trust and confidence

Contractual terms implied by fact—the court's approach: clarification by the Supreme Court in Marks and Spencer

These have been described as terms which are implied as

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