When it comes to contracts, it is essential that all parties involved understand the terms of the agreement. Contractual agreements can be both written and verbal, and they lay out the terms and expectations of a business relationship. Two essential types of terms in a contract are express terms and implied terms.
Express terms refer to the clearly stated terms of a contract, either written or verbal. These can include details such as payment terms, delivery dates, and the scope of work. Express terms are typically negotiated between the parties involved in the contract.
For example, an express term in a contract between a client and a freelance writer may include the number of articles to be written, the rate of payment, and the deadline for the delivery of each article. By clearly defining these terms, both parties are aware of their obligations and responsibilities under the contract.
Implied terms, on the other hand, are terms that are not explicitly stated in the contract, but are still expected to be upheld because of certain legal principles. Implied terms can be categorized into four different types:
1. Terms implied by statute: These are terms that are automatically included in a contract due to the existence of a particular law or statute. For example, a contract between an employer and an employee may include implied terms regarding working hours, wages, and benefits, all of which are laid out in employment laws.
2. Terms implied by custom: These are terms that are not written into the contract but are expected to be upheld due to industry or regional customs. For example, in the construction industry, it is customary for contractors to use specific materials and complete work to a particular standard.
3. Terms implied by previous dealings: These are terms that are not explicitly stated in the current contract, but have been followed in previous contracts between the parties. For example, if a construction company has worked with a particular supplier in the past, they may expect the same pricing and quality of materials on future projects.
4. Terms implied by courts: These are terms that courts may include in a contract if they deem it necessary to make the contract workable between the parties. These terms are typically implied to protect and define the rights and responsibilities of both parties.
In conclusion, for any contractual agreement, both express and implied terms must be understood and agreed upon by all parties involved. While express terms are explicitly stated in the contract, implied terms are not, but are just as crucial to the contract`s success. Both parties must be aware of their obligations and responsibilities under the contract to ensure a successful business relationship.