Nature of terms 73Express terms
A contract is formed when an offer is accepted. The offeror proposes a set of terms. If the
offer is accepted by the offeree, these proposed terms become legally binding as the terms
of the contract. Oral contracts usually contain very few express terms. Written contracts,
especially business contracts, usually contain far more. If there is any conflict between an
express term and an implied term the express term will prevail, unless the implied term is
a statutory one which cannot be changed. (See below at p. 105.)
Terms implied by the courts
The courts have the power to imply terms into contracts. Despite having this power, the
courts have always made it plain that they are not prepared to make a contract for the par-
ties. The courts will imply a term on only two grounds. First, that it was so obviously
intended to be a part of the contract that the parties felt no need to mention it. Second, that
the term must be implied as a matter of law.
Terms based on intentions of the parties
Care must be taken when looking for terms implied by the courts, as the courts do not imply
them freely.
Lord Pearson said in Trollope vNWRHB (1973):
An unexpressed term can be implied if and only if the court finds the parties must have intended
that term to form part of their contract...it is not enough for the court to find that such a term
would have been adopted by the parties as reasonable men if it had been suggested to them...it
must have been a term which went without saying, a term necessary to give business efficacy to the
contract.
If the courts were prepared to imply terms freely, they would move towards making a
contract for the parties rather than giving effect to what the parties had themselves agreed.
Customary terms
Terms may be implied by the courts on the grounds that they are customary in a particular
trade, customary in a particular locality or customary between the parties.
Many trades have customs, and these customs will be implied into contracts made within
the context of those trades. In the bakery trade, for example, a dozen used to mean 13, and
a baker who sold 20 dozen loaves would be deemed to have sold 260, not 240.
The Moorcock (1889) (Court of Appeal)A jetty owner made a contract which allowed a shipowner to moor his ship at the jetty. Both
parties knew that the ship would be grounded at low tide. When the ship did touch the
ground it was damaged because there was a ridge of rock beneath the mud. The shipowner
asked the court to imply a term that the jetty owner had taken reasonable care to ensure
that the jetty was a safe place to unload a ship.
HeldThe term was implied by the court. The jetty owner had breached the term and was
therefore in breach of contract. It was obviously intended by both parties that the mooring
should be safe.