Implied: Overview, definition or example
What does implied mean?
Implied refers to terms, rights, or responsibilities that aren’t explicitly stated in a contract but are assumed to exist based on the nature of the agreement, the relationship between the parties, or the law. These terms are understood to apply, even though they’re not written down or clearly spoken.
For example, when you hire a contractor to build something, it’s implied that they will use materials that are suitable for the job, even if this isn’t specifically mentioned in the contract.
Why is implied important?
Implied terms are important because they fill in gaps in agreements, ensuring fairness and practicality in business relationships. They recognize that not every detail can or needs to be spelled out in a contract, especially when certain standards or expectations are already established by law or common practice.
For businesses, implied terms help ensure that agreements are reasonable and enforceable, even when specifics are left unstated. However, relying too heavily on implied terms can lead to disputes, as they are open to interpretation.
Understanding implied through an example
Imagine a café leases space in a shopping mall. While the lease agreement doesn’t explicitly say the landlord must maintain the air conditioning, it’s implied that the landlord will ensure the building’s facilities are functional. If the air conditioning breaks and isn’t fixed, the café could argue that the landlord breached this implied term.
In another case, a supplier agrees to deliver goods to a retailer without specifying the packaging. It’s implied that the goods will be delivered in suitable, undamaged packaging because this is a standard expectation in the industry.
An example of an implied clause reference
Contracts often address implied terms explicitly to avoid misunderstandings, such as:
“This Agreement represents the entire understanding between the Parties. No implied terms shall apply unless required by law.”
Conclusion
Implied terms are unstated but assumed elements of a contract, based on common sense, industry standards, or legal requirements. They ensure that agreements remain practical and fair, even when not every detail is explicitly written out.
By understanding implied terms, businesses can recognize their unspoken responsibilities and rights while crafting clear agreements to avoid potential disputes. They’re an essential part of making contracts both functional and enforceable.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.