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 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
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.