Express Terms vs Implied Terms
Last updated: February 2025
Quick Comparison
| Aspect | Express Terms | Implied Terms |
|---|---|---|
| Origin | Agreed by the parties explicitly | Imposed by law, custom, or the courts |
| Awareness | Parties are aware they have agreed to these | Parties may not know these terms exist |
| Precedence | Generally take priority over implied terms | Yield to express terms unless mandatory by statute |
| Flexibility | Can be negotiated and tailored | Statutory implied terms cannot be excluded in consumer contracts |
What Is a Express Terms?
Terms that the parties have explicitly agreed and stated in the contract, whether written or oral.
Key Features
- • Explicitly stated in the contract document
- • Reflect the parties' actual agreed intentions
- • Can be written or oral (though written is preferred)
- • Take precedence over implied terms in most cases
Best For
- • Defining the specific obligations of each party
- • Addressing foreseeable risks and scenarios
- • Providing certainty about payment, scope, and timelines
What Is a Implied Terms?
Terms that are not expressly stated but are incorporated into the contract by statute, custom, or the courts to give the agreement business efficacy.
Key Features
- • Incorporated by statute, custom, or judicial implication
- • Fill gaps where express terms are silent
- • Include statutory rights under the Sale of Goods Act and Consumer Rights Act
- • Can be implied by business custom or trade usage
Best For
- • Providing baseline protections where contracts are silent
- • Ensuring statutory minimum standards are met
- • Reflecting established business customs and practices
When to Use a Express Terms
Always use express terms to define the key aspects of your agreement: scope, price, payment, liability, termination, and IP. The more comprehensive your express terms, the less you rely on uncertain implied terms.
When to Use a Implied Terms
Implied terms operate automatically. You do not choose to use them, but you should be aware of them. Key statutory implied terms include reasonable skill and care in service contracts and satisfactory quality in goods contracts.
Which Does Your Business Need?
You need both. Express terms form the backbone of your contract, while implied terms provide a safety net. Draft comprehensive express terms to minimise reliance on implied terms, but be aware that some statutory implied terms cannot be excluded, particularly in consumer contracts.
FAQ
Can I exclude implied terms from my contract?
You can exclude some implied terms in business-to-business contracts, subject to the reasonableness test under the Unfair Contract Terms Act 1977. However, certain implied terms in consumer contracts under the Consumer Rights Act 2015 cannot be excluded at all.
What is the business efficacy test for implied terms?
A court will imply a term if it is necessary to give the contract business efficacy, meaning the contract would not work commercially without it. The term must be reasonable, equitable, obvious, capable of clear expression, and not contradict any express term.
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