Express terms are statements actually made by one of the parties, either in writing or orally. They do not always make up the whole contract and there may be other terms which can be implied into it. The basic principle of implied terms is that a term will be implied where it is necessary in order to bring the contract into line with the presumed intention of the parties. This is not to say that the courts are in the business of making reasonable deals for contracting parties, but rather that they have the power to supplement, or complete, an incomplete agreement. A term is not implied because it is reasonable to imply it, rather once it has been decided to imply a term, the content of that term must be reasonable. The golden rule is that implied terms cannot be read in where this would be inconsistent with the express terms of the agreement.

An early case which is often cited is that of The Moorcock (1889, C.A.), in which the court held that there was an implied term in the contract between

The implied term of reasonable fitness is absolute, in the sense that the seller is liable for breach even if he has not at all been negligent. This absolute form relating to Sale of Goods Act can be applied to contracts other than for the sale of goods, eg, those for hire and those for repair, when the contractor is said to be under "strict liability". Where the implied term has developed independently of Sale Of Goods Act it takes a qualified form, for example, a carrier of passengers is not absolutely liable, he has only "negligence liability".

The strict proof required before a term will be implied has made it almost impossible to imply a term incorporating future collective agreements, or even an existing recognition agreement. In Faithful v. Admiralty (1964) it was held that a custom of applying collective agreements spanning 40 years did not suppose a term that all future collective agreements were incorporated. It only showed that the employer had accepted the advice rendered to him via the agreement; it did not mean he had bound himself to accept all future advice. In Gallagher v. Post Office (1970) it was held that it was not necessary, on grounds of business efficacy, to imply the incorporation of a recognition agreement. It is not enough that the term should be reasonable; it must be both obvious and necessary

An implied term can evolve into a rule of law if it has become well settled by a series of judicial decisions in similar circumstances. This is evident i

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