Implied Terms. Flashcards
What is an implied term?
A term where it does not need to be expressed - it is in the contract automatically.
What is the key case?
Mahmud v Bank of Credit and Commercial International SA.
What is an express term?
Self-explanatory term which is expressed.
What are the 3 ways implied terms can be put into contract?
- By statute.
- By custom.
- By the courts.
What are the two main statutes Parliament incorporated implied terms into?
Sale of Goods Act 1979.
Supply of Goods and Services Act 1982.
What are the 2 policy grounds for implied terms by statute?
- Efficiency.
- Protection of expectations of buyers.
What are the 4 sections of the Sale of Goods Act 1979?
S.12: Seller has a right to sell goods.
S.13: Goods will match their description.
S.14: ‘Satisfactory quality’ and fit for purpose.
S.15: If sale by sample, bulk will match sample.
What does S.13 of Supply of Goods and Services Act 1982 say?
Implied term that supplier will carry out service with reasonable care and skill.
What does it mean if a term is implied by custom (and case)?
If by a known usage that is “notorious, certain and reasonable” - not desirable. Hutton v Warren.
What are the 2 ways courts can impose implied terms?
- In fact.
- In law.
How is a term implied ‘in fact’ (and case)?
- To give unexpressed intention
- Necessity: made a contract and missed something out. Unforeseen circumstances and courts can imply a term where necessary.
- The Moorcock.
What is it called when the courts put an implied term into the contract ‘in fact’
Ad hoc gap filler.
What is the Business Efficacy Test?
What is necessary to give the contract business efficacy, contract wouldn’t have existed at all if the term wasn’t included.
What is the Officious Bystander Test (and case)?
If an officious bystander thinks term should be included expressly in contract and parties think its too obvious it doesn’t need to be.
- Reigate v Union Manufacturing Co.
How is an implied term put into contract ‘in law’?
Term implied into all contracts of a particular type because of nature of relationship.
Test of reasonableness and necessity.
