Implied terms in construction contracts
Implied terms in construction contracts

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

  • Implied terms in construction contracts
  • What are implied terms?
  • Terms implied by statute
  • Terms implied into building contracts by common law
  • Terms implied in fact
  • Terms implied via other means
  • Entire agreement clauses

The implication of terms into a contract is a large and complicated area of law. Sometimes, a particular term will be implied automatically into all contracts of a specific type, either by statute or by common law. In other cases, implied terms are a way of supplying words which are not in the contract by looking at the original intended meaning of the contract when the parties entered into it, and to make the contract work.

This Practice Note looks at implied terms in the context of construction contracts—for more detailed commentary on implied terms generally and the difference between terms and representations, see Practice Note: Contract interpretation—express terms in contracts.

What are implied terms?

An implied term is one that has not been expressly agreed between the parties and is therefore not recorded in the contract. It will be implied into the contract for various reasons and in various circumstances—for example if it is necessary to give the contract business efficacy (ie the term is necessary to make the contract work).

It is common for gaps to exist in the express terms of a building contract but these are often only spotted by the parties when something doesn’t happen in the way that one, or both of them, intended or expected it to. Implied terms are not, however, simply a means of plugging the holes that the

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