UK: What Are You Implying? When May Terms Be Implied Into a Contract?

Last Updated: 29 July 2010
Article by Tom Coulson

A contract is a written agreement which encompasses the oral and written negotiations and agreements of the parties. Provided that the necessary factors, such as offer and acceptance, consideration and intention to be contractually bound, are all present, a contract will be formed. Whilst the words, whether written or spoken, which the parties use in formulating the agreement are the express terms of the contract, it is important to bear in mind that these may not constitute the whole agreement. The parties to a contract cannot possibly contemplate every contingency and eventuality that may arise over the course of a contractual relationship. The result is that gaps are inevitably left in the express contractual terms. For this reason, the Courts are prepared to imply terms into a contract, either as a matter of custom, by statute or by common law.

Express Terms

The express terms of a contract are those terms that have been specifically mentioned and agreed by both parties at the time the contract is made. They can either be oral or recorded in writing.

Implied Terms

Inevitably the express terms of an agreement will set out the primary obligations of the parties. However, rarely will the express terms deal with all eventualities. It may be that a specific event did not occur to the parties at the time of drafting, or that the parties thought the matter was obvious and therefore they did not think it necessary to mention it.

Whatever the reason for the omission, additional terms may be implied into the contract to fill the gap where it is equitable and reasonable to do so. However, a term will not be implied if it would be inconsistent with the express wording of a contract. This article explores the principal factors which may determine whether a term will be implied into a contract.

Intention of the Parties

The basic principle is that a term will be implied into a contract where it is necessary in order to reflect the intention of the parties. In other words, a Court will imply a term into a contract if, in the Court's opinion, it is apparent from the facts that the parties must have intended that term to form part of that contract.

The intention of the parties is ascertained from an objective viewpoint. In construing the parties' intentions, the Court will consider what a reasonable person would have under - stood the parties' intentions to be, given the background knowledge reasonably available to the parties at the time they entered the contract.

A useful test for determining the intention of the parties is the 'officious bystander' test. This holds that if, while the parties were making their bargain, an 'officious bystander' were to suggest some express provision for it in their agreement, they would testily suppress him with a common 'oh, of course!'

Implying a term into a carefully drawn up contract to fill a gap for which the parties had inadvertently not provided is justified only in cases of necessity and only if certain other requirements are satisfied. The implied term, for example, should not be unreasonable or inequitable, should not be incapable of clear expression and should not be contrary to the express terms. For the Courts to imply a term, it is not enough that the term should have been reasonable; it must be both obvious and necessary.

Usage or Custom

In the event where a provision could be deemed to be 'notorious, certain and reasonable and not contrary to law', an implied term can arise. In other words, frequent usage between the parties or because of widespread custom may result in a term being implied; however this will only occur when it is considered necessary to do so. Such a term would not be implied if there was express wording to the contrary, for example an entire agreement clause.

Terms Implied by Statute

Sale of Goods Act 1979

The Sale of Goods Act 1979 (SGA) defines a contract for the sale of goods as "a contract by which the seller transfers or agrees to transfer the property in goods to the buyer for a money consideration, called the price" (s.2(1)). The SGA imposes the following implied terms in contracts for the sale of goods:

  • good title: it is implied that the seller has the right to sell the goods (s.12(1) SGA);
  • no encumbrances and quiet possession: it is implied that the goods are free from charges or encumbrances and that the buyer will enjoy quiet possession of the goods (s.12 (2) and (3) SGA);
  • correspondence with description: it is implied that, when goods are sold by description, they correspond with that description (s.13 SGA);
  • and perhaps the most significant implied term:
  • satisfactory quality: it is implied that the goods are of a satisfactory quality (s. 14(2) SGA). The goods' quality will be ascertained by reflection on the following (s.14 (2B) SGA):
    • fitness for purpose;
    • appearance and finish;
    • freedom from minor defects;
    • safety; and
    • durability.
  • Fitness for purpose: in the event that goods are sold in the course of a business and the buyer, whether expressly or by implication, makes it known to the seller the purpose for which the goods are being purchased, it will be an implied term that the goods will be reasonably fit for that purpose.

Supply of Goods and Services Act 1982

This Act (SGSA) governs contracts which relate to the supply of services as opposed to the sale of goods, although the terms implied under this Act are somewhat similar to those terms implied by the SGA. Under the SGSA the following terms will be implied into a contract for the supply of services:

  • reasonable care and skill: it is an implied term that the service will be carried out with reasonable care and skill (s.13 SGSA);
  • reasonable time: it is an implied term that the service will be conducted within a reasonable time frame (s.14 SGSA). What is deemed to be reasonable will hinge on the facts of each individual case; and
  • reasonable charge: where consideration is not stipulated by the contract, it will be an implied term that the services will be priced 'at a reasonable charge' (s.15 SGSA).

Excluding Implied Terms

Whether or not it is possible to exclude implied terms will depend on whether the contract is between businesses or a business and a consumer.

The Unfair Contract Terms Act 1977 (UCTA) prohibits exclusion of the implied term as to right to title under the SGA irrespective of whether or not the seller is dealing with a business or a consumer.

Where the seller is dealing with a consumer, it will be prohibited from excluding any of the implied terms listed above. A 'consumer' is defined under s.12 UCTA as follows:

  • the consumer does not make the contract in the course of a business;
  • the other party making the contract does so in the course of a business; and
  • the goods being supplied are of a type ordinarily supplied for private use of consumption.

In the event that the buyer is not a consumer, but dealing in the course of a business, any attempts to exclude an implied term will be subject to the reasonableness test, which is examined in detail in the limitation of liabilty article.

In conclusion, when dealing in the course of a business with another business, it is infinitely preferable to rely on explicit express drafting in a contract as opposed to being in a position where terms can be implied by the Courts arising either from statute or from trade usage. Whilst implied terms will not be implied that do not reflect the intentions of the parties, it is clearly preferable to have express wording which reflects the parties' positions as opposed to the Court's interpretation of this. That said, it is extremely difficult to provide for each eventuality during the course of a contract and thus, at the very least, awareness of the potential burden of implied terms should be considered.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions