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Contract: Terms

Implied terms

  • 3 things to know
  • A2 Units 3 and 4

Overview

Implied term and officious bystander test.

What you need to know

Answer each one before you reveal it.

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Key term

What does the Consumer Rights Act 2015 imply into a consumer contract for a service?

Key term

How do terms implied by law differ from terms implied in fact?

Key term

What did Liverpool City Council v Irwin (1977) imply into a tenancy of a tower block?

Questions from this subtopic

Each one with the model answer underneath.

  1. 1

    What is an implied term?

    Model answer

    An implied term is one that the parties did not state but which is read into the contract by a court, by custom or by statute.

  2. 2

    What test for implying a term was laid down in The Moorcock (1889)?

    Model answer

    A term may be implied where it is necessary to give the contract business efficacy, so the owners of the wharf were taken to have promised that the river bed alongside was safe for the ship to rest on.

  3. 3

    State the officious bystander test.

    Model answer

    Formulated in Shirlaw v Southern Foundries (1939), the test asks whether the term is so obvious that if an officious bystander had suggested it while the contract was being made, both parties would have replied that of course it was included.

  4. 4

    What did Marks and Spencer plc v BNP Paribas (2015) confirm about implying terms in fact?

    Model answer

    It confirmed that a term will be implied only where it is necessary to give the contract business efficacy or is so obvious as to go without saying, and that it is not enough that the term would be reasonable or fair.

  5. 5

    How do terms implied by law differ from terms implied in fact?

    Model answer

    A term implied in fact reflects what these particular parties must have intended, whereas a term implied by law is attached to every contract of a given type as an incident of that relationship.

  6. 6

    What did Liverpool City Council v Irwin (1977) imply into a tenancy of a tower block?

    Model answer

    The House of Lords implied an obligation on the landlord to take reasonable care to keep the common parts, including the lifts and stairways, in reasonable repair, as a necessary incident of that kind of letting.

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