74 Chapter 3The terms of the contract
In a similar way, customs of a particular locality will be implied into contracts made in
that locality.A term can become customary between the parties to the contract if they regularly make
contracts which include such a term.
In Kendall vLillico (1969)the parties had often dealt with each other. Whenever an oral
contract was made, the same ‘sold note’ containing a large number of terms was always sent
the following day. The House of Lords held that the terms in the ‘sold note’ had become
customary between the parties and were therefore incorporated into an oral contract which
was made. (See also Photolibrary Group Ltd vBurda Senator Verlag Gmbh (2008)on p. 41).
However, the course of dealing must be well established. In Hollier vRambler Motors Ltd
(1972)the claimant had signed the same exclusion clause three or four times in the previous
five years when he had had his car repaired at the defendant’s garage. The car was dam-
aged while being repaired under a contract made orally. The garage tried to rely on their
exclusion clause but the court held that they could not do so. The exclusion clause was not
incorporated into the oral contract. Salmon LJ said: ‘I am bound to say that, for my part, I
do not know of any other case in which it has been decided or even argued that a term could
be implied into an oral contract on the strength of a course of dealing (if it can be so called)
which consisted at the most of three or four transactions over a period of five years.’Terms implied as a matter of law
The courts imply terms into particular types of contracts as a matter of law. These terms are
not implied because the parties must have intended them to be a part of the contract. They
are implied because, as a matter of law, such terms are always implied into the type of
contract in question. For example, in Liverpool City Council vIrwin (1977)the House of
Lords implied a term that the landlord of a block of flats would keep the flats in reasonable
repair and reasonably usable. This term was implied because such a term would be implied
generally into contracts between landlord and tenant.
In Chapter 13 it will be seen that certain terms are implied generally into contracts of
employment.Exclusion of implied terms
Later in this chapter we shall see that the terms implied by statutes can never be excluded
in consumer cases and can be excluded in non-consumer cases only where this is reason-
able. However, terms implied by the court on the basis that they are customary, or are what
the parties obviously intended, can always be excluded by an express term.
If, for instance, the lease in Hutton vWarrenhad expressly stated that the tenant farmer
would not get an allowance for seeds and labour, then he would not have received such an
allowance.Hutton vWarren (1836)A Lincolnshire tenant farmer was given notice to quit the farm. The farmer said that the con-
tract contained an implied term that he should be paid an allowance for seeds and labour.
HeldThe term was implied because it was an agricultural custom in that part of
Lincolnshire.