Contracts have two types of provisions: express terms and implied terms. Implied terms are not specifically written but are assumed to be included. They offer legal protection against fraud and misrepresentation. Laws recognizing unwritten terms vary between regions, but many countries have standardized them in sales contracts. Implied terms can be voided if specifically stated in a contract, but cannot be waived if their omission would make the contract unlawful.
In most contracts, there are two sets of provisions: implied terms and express terms. The terms expressed are the specifically written conditions. Implied terms are provisions that are purported to be contained in a contract even if they are not specifically addressed.
The legal recognition of implied terms takes into account the fact that certain words and phrases are in the public domain and do not need to be defined in detail in a contract. It also assumes that when a word has more than one meaning, the meaning used will be the most reasonable within the context. For example, if a product is sold by the foot or yard, it is implied that the measurement will be in 12 inch (or 0.3 meter) increments rather than a comparison to the seller’s body part.
In contracts for the sale of goods, it can reasonably be assumed that the seller owns or has the right to sell the property. It is also assumed that the items sold will be those offered. Acknowledgment of these implied terms offers legal protection against fraud by omission and misrepresentation.
Typically, cases involving a violation of an implied term are handled through the civil or common courts. In rarer cases, criminal charges can occur. For example, in real estate law, it is assumed that the accommodation offered for rent is habitable. Small-scale violation of these terms is usually punished with fines. If the violations are grossly negligent or exist on a large scale, violators can be prosecuted under various versions of the “Slum Lord” laws.
Laws recognizing unwritten terms are, by necessity, more open to individual interpretation than most other statutes. This is inherently problematic, as what is common sense to one person may not be common sense to another. Implied terms can also be based largely on the social norms of an area, so continuity between regions is unpredictable.
Many countries have taken steps to standardize the application of unwritten terms, especially in sales contracts. The UK successfully codified many implied terms in 1979 with the revision of its Sale of Goods Act. Since then, the act has been amended several times to incorporate new terms and products. Many other countries, including Canada, the United States and France, have also adopted similar laws.
In some cases, an implied term may be voided if specifically stated in a contract. Typically, these are contracts that involve uncommon definitions or terms. Implied terms cannot be waived in circumstances where their omission would make the contract unlawful.
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