Audio recording 13.1

The law concerning implication is linked very closely to interpretation, and what we looked at in the previous chapter. But I think there was an important difference between interpreting express terms, which have been written down in the contract and the language is chosen by the parties, and implication which involves dealing with terms which are not expressly laid out by the party. You can't really interpret silence so convincingly. So, I think when we're implying terms, we are adding to the express written terms of the contract. But someone like Lord Hoffman would basically collapse interpretation, implication into one topic. But just as Arnold v Britton, rose back from ICS and Chartbrook, the decisions of Lord Hoffman, I think that the Supreme Court in Marks &Spenceralso rose back from Lord Hoffman's decision on implied terms in the Belize case. So, the traditional approach to imply term survives, and very clearly the touchstone for implication, the touchstone for implying terms into a contract is necessity. And there's no broader test. So, there's no jurisdiction to improve a contract, to improve a bargain by adding further terms through implication, just because it would be reasonable to do so. So, the touchstone, no matter whatthe type of implied term you're thinking about is necessity. And I think it's helpful to think of implied terms as splitting into two main groups. The first concerns terms implied in fact, and the second terms implied at law. So, terms implied in fact, are terms relating to that particular contract, and the implied term has to be necessary to reflect the party's intentions. Whereas terms implied at law, are terms applied into a particular type of contract and they're necessary to give effect to that type of contract. So, not necessarily to affect the party's intentions, but necessary for the proper working of that type of contract. And at the moment, there is a lot of litigation, and a lot of debates about whether the terms that the parties should perform in good faith in some way should be implied into contracts and implied into commercial contracts in particular. And we'll look at this in more detail in chapter twenty.