What Are Implied Terms?

In most contracts, there are two sets of provisions: implied terms and express terms. Express terms are the conditions that are specifically written. Implied terms are provisions that are assumed to be in a contract even if they are not specifically addressed.

The legal recognition of implied terms takes into account that certain words and phrases are common knowledge and do not need to be defined in detail within a contract. It also assumes that when a word has more than one meaning, the meaning used will be the most reasonable within the context. For example, if a product is being sold by the foot or meter, it is implied that the measurement will be 12-inch (or 0.3-meter) increments rather than a comparison to the seller’s body part.

In contracts for the sale of goods, it can be reasonably assumed that the seller owns or has the right to sell the property. It is further assumed that the items being sold will be the ones offered. The recognition of these implied terms gives legal protection against fraud by omission and misrepresentation.

Generally, cases involving a violation of an implied term are handled through civil or common courts. In rarer cases, criminal charges may occur. For example, in real estate law, it is assumed that housing offered for rent is habitable. Violation of these terms on a small scale is generally punished by financial sanctions. If the violations are grossly negligent or exist on a large scale, then offenders may be prosecuted under the various versions of “Slum Lord” laws.

Laws recognizing unwritten terms are, by necessity, more open to individual interpretation than most other statutes. This is inherently problematic, as what is common sense for one person may not be for another. Implied terms also can very widely based on the societal norms of an area, so continuity between regions is unpredictable.

Many countries have taken steps to standardize the enforcement of unwritten terms, especially in sales contracts. The United Kingdom successfully codified many implied terms in 1979 with the revision of its Sale of Goods Act. Since then, the act has been modified several times to incorporate new conditions and products. Many other countries, including Canada, the United States and France, have also adopted similar laws.

In some cases, an implied term can be voided if specifically addressed in a contract. Generally, these are contracts that involve uncommon definitions or conditions. Implied terms can not be waived in circumstances where their omission would make the contract illegal.