When it comes to contracts, the words used can be crucial in defining the terms of the agreement. However, not all terms need to be explicitly stated in the contract. In fact, there are certain terms that can be implied into a contract, which are just as enforceable as explicit terms.
Implied terms are not expressly stated in the contract but are instead inferred from the circumstances surrounding the agreement. These terms are often seen as necessary to give business efficacy to the contract or to give effect to the intentions of the parties. Here are some examples of terms that can be implied into a contract:
1. The term of good faith: This term implies that the parties to a contract will act in good faith and deal fairly with each other. This includes avoiding any conduct that could damage the other party or the relationship between them.
2. The term of reasonable care: This term implies that the parties will take reasonable care to ensure that the obligations set out in the contract are fulfilled. This includes taking steps to prevent any loss or damage that could be reasonably foreseen.
3. The term of mutual trust and confidence: This term implies that the parties will work together in a spirit of cooperation and will not conduct themselves in a manner that undermines the relationship between them.
4. The term of performance: This term implies that the parties will perform their obligations under the contract with due diligence and in a timely manner. This includes meeting any deadlines or quality standards specified in the contract.
5. The term of payment: This term implies that the parties will pay each other for the goods or services provided under the contract. This includes making payments in a timely manner and according to the agreed upon terms.
It is important to remember that implied terms can vary depending on the type of contract and the circumstances surrounding the agreement. It is also essential to ensure that any implied terms are consistent with the explicit terms of the contract.
In conclusion, while explicit terms are necessary to define the terms of a contract, implied terms can be just as important. These terms can help to ensure that the parties act in good faith, perform their obligations, and maintain a mutually beneficial relationship. As such, it is essential to be aware of what terms can be implied in a contract and to ensure that they are consistent with the overall intentions of the agreement.