H418/04 - Express and implied terms

Promises and representations

A term is a legally enforceable part of the contract: breaking it is a breach of contract. An express term is agreed in words, orally or in writing. An implied term enters through law or the parties' established dealings without being expressly agreed on this occasion. A contract to repair a bicycle can therefore contain an oral promise to finish on Friday and a statutory duty to use reasonable care and skill.

A pre-contract statement may instead be a representation: it encourages agreement without becoming a promise. A false representation may trigger misrepresentation remedies, even if it is not a term. A vague advertising boast such as “the world's best bicycle” may be a puff, with no sufficiently definite promise of measurable quality. These categories depend on the objective meaning in context; calling everything said a term is a mistake.

Courts consider the statement's importance, the parties' relative expertise, the time before agreement, and whether a later written contract includes it. In Dick Bentley Productions v Harold Smith (Motors) (1965) a specialist dealer's statement about a car's mileage became a contractual promise: the dealer was in a position to know or check. In Oscar Chess v Williams (1957) a private seller who relied on the registration document did not warrant a car's model year to an expert dealer. Expertise is evidence of responsibility, not a rule that every dealer statement is necessarily a term.

Original example: Jo asks a piano seller to promise that the instrument is suitable for concert performance, explaining that Jo will not buy otherwise. A clear assurance given to secure the sale strongly supports a term. If the seller merely repeats an unverified guess and tells Jo to obtain an independent assessment, the argument for a promise weakens. First identify what was actually undertaken; classification of its importance comes later.

Signature and reasonable notice

Incorporation asks whether a proposed term became part of the agreement at all. This is separate from asking what it means or whether legislation permits it.

Signing a document containing contractual terms normally binds the signer even if they did not read it: L'Estrange v Graucob (1934). The rule makes signed commercial agreements dependable, but assumes a contractual document and does not defeat fraud, misrepresentation or statutory protection. In Curtis v Chemical Cleaning (1951) an assistant misdescribed the scope of a signed exclusion. The cleaner could not rely on the wider exclusion after obtaining the signature through that explanation. A signature is therefore powerful evidence of agreement, not permission to mislead.

For unsigned terms the party relying on them must take reasonable steps to give notice before or when the contract is formed. Actual reading is not essential if reasonable notice was given. A term on a mere receipt, or a notice first seen afterwards, is less likely to qualify. In Thornton v Shoe Lane Parking (1971) the automatic parking contract was formed when the customer accepted the machine's offer; additional conditions on the ticket arrived too late. The more unusual or onerous a term is, the more conspicuous the notice required. Interfoto v Stiletto (1989) concerned a very high holding charge for photographic transparencies, which had not been specially drawn to the recipient's attention. The notice principle extends beyond exclusions.

Original application: a hire shop displays an ordinary late-return fee beside the booking desk before payment. Reasonable notice is plausible. A £1,000 daily storage fee hidden on the receipt handed over after agreement has both timing and prominence problems. Showing a large warning before agreement improves incorporation, but does not establish that the fee is legally fair.

Dealings and common-law implication

A regular and consistent course of dealings can establish a term without repeating it in the latest agreement. The parties' history supplies evidence that they contract on the established basis. In Hollier v Rambler Motors (1972) three or four transactions over about five years were not a sufficiently regular course to incorporate an exclusion into a later oral repair contract. Repetition alone is not enough: frequency, consistency and the same terms matter. A monthly delivery contract on identical known conditions provides a stronger argument than occasional transactions on different forms. This route is often described as implication from dealings, although its practical issue is whether established terms were incorporated.

Common law also implies terms to fill necessary gaps. Implication in fact concerns this particular contract. The business efficacy approach asks whether the term is necessary to make the agreement work commercially; the officious bystander approach asks whether the term is so obvious that both parties would have accepted it without discussion. These are demanding tests, not invitations to insert whatever seems fair. A proposed term must be clear and consistent with the express agreement. In Marks and Spencer v BNP Paribas (2015) the Supreme Court refused to imply a rent-refund term after an agreed lease break: apparent fairness did not establish necessity.

Implication in law supplies duties for a recognised type of relationship where necessary. In Liverpool City Council v Irwin (1976) the House of Lords implied a landlord's duty to take reasonable care of essential common facilities in a tower block. It did not promise that the lifts would never fail. Identifying the duty's standard matters as much as identifying its existence.