When it comes to interpreting contracts, it`s essential to understand the difference between express and implied terms. Express terms are those that are specifically stated in the contract, while implied terms are those that are not stated explicitly but still exist based on the circumstances surrounding the contract.
Express terms:
Express terms are the most obvious and straightforward terms in a contract. These are the terms that are explicitly stated by both parties, whether they are written or verbal. Express terms are typically the most important parts of a contract because they outline the rights and responsibilities of both parties.
It is important to ensure that express terms are clearly worded, unambiguous, and legally binding. Any ambiguity or vagueness in express terms can lead to disputes between the parties. Therefore, it is necessary to ensure that all parties involved are aware of what they are agreeing to in the express terms of the contract.
Implied terms:
Implied terms are not explicitly stated in the contract, but they are still crucial in determining the rights and obligations of the parties. The courts often imply terms into contracts to ensure that they are fair and reasonable.
Implied terms can come in different forms, and the most common way of implying terms is by the law. The law can imply terms into a contract in various ways, such as by custom, trade practice, or previous dealings between the parties. These terms are implied automatically and cannot be excluded by either party.
Another form of implied terms is through the conduct of the parties. If the parties` behavior after the contract is signed implies that they have agreed to something, then that can be used to imply a term into the contract.
Implied terms are not always easy to determine, and disputes may arise as to whether a term should be implied or not. It is essential to consider the specific circumstances of the contract and the intentions of the parties when determining whether a term should be implied.
In conclusion, both express and implied terms are important in any contract. Express terms outline the rights and obligations of the parties, while implied terms ensure that the contract is fair and reasonable. It is crucial to ensure that express terms are clear and unambiguous, while implied terms must be determined based on the specific circumstances and conduct of the parties involved.