Tacit-And-Implied-Terms-Of-Contract-Marume-and-Furidzo-Legal-Practitioners

Tacit And Implied Terms Of Contract

A tacit term of a contract is an unexpressed provision of the contract which derives from the common intention of the parties, as inferred by the court from the express provisions of the contract and the surrounding circumstances. Tacit terms of the contract are read into the contract because it is assumed that although the parties did not include them expressly they would have done so had they thought about them at the time.

The test used for the existence of tacit terms is ‘whether it can be confidently said that if at the time the contract was being negotiated someone had said to both parties, ‘what will happen in such a case?’ they would have both replied, ‘Of course so and so will happen; we did not trouble to say that;it is too clear’.(Reigate v Union Manufacturing Co. (Ramsbottom Ltd & Another), [1918] 1 KB 592, 605)

In general, the courts are reluctant to imply terms into a contract at common law.  It is the contracting parties’ role to agree the terms of their particular agreement.  It is generally not considered to be the role of the courts to re-write a contract for the parties.  Freedom of contract prevails.  The limited circumstances where a court will imply a term into a contract at common law relate to (a) terms implied through custom or trade usage (where a particular term is prevalent in a trade) (b) tacit terms or terms implied from the facts which include the business efficacy test (i.e. would the contract make business sense without it?) and the officious bystander test (i.e. would the parties have been agreed on the matter had they thought about it?) and (c) terms implied by law in contracts of a defined type.

In Douglas v Baynes [1908] TS 1207, the court cited with approval remarks in Hamlyn & Co. v Wood & Co. [1891] 2 QB, 494 that:-

“The court ought not to imply a term in a contract unless there arises from the language of the contract itself, and in the circumstances under which it is entered into, such an inference that the parties must have intended the stipulation in question that the court is necessarily driven to the conclusion that it must be implied.”

In Reigate v Union Manufacturing Co. (Ramsbottom Ltd & Another), (supra) it  was emphasized that a term can only be implied if it is necessary in the business sense to give efficacy to the contract.  It is a requirement that a person relying on an implied term must prove the circumstances from which he maintains it should be implied – Christie, Business Law in Zimbabwe, p 61; Christie, The Law of Contract in South Africa 3rd Ed p 185.

Further if a contract is silent on particular terms and conditions laid down in applicable legislation, the provisions of legislation will be ‘read into’ the contract as if the parties have agreed to them.

In Mazibuko v Christian Brothers College Board of Governors and Others SC 54/17 the court was called upon to consider the applicability of implied terms in a dispute between a parent and a school. The appellant’s main complaint before the High Court was that he had to spend an average of US$400 annually in order to purchase books and stationery required by the school.  He believed that the substantial school fees that parents with children at this institution pay should cater for items such as stationery, textbooks and other extracurricular activities.  Instead of purchasing these items, the school spends over eighty per cent of its budget on teachers’ salaries.  He considered this conduct a violation of a child’s right to education and a breach of the implied term in the contract entered into by the school and parents that the school would provide these essential items.  He contended that the implied term is so obvious as not to require express provision. He sought, among other things, a declaratur that the failure by the school to provide textbooks and stationery amounts to a violation of a child’s right to a proper education and a breach of the implied term of the contract signed by the school and the parents.The school denied that school fees payable by parents necessarily included a fee for textbooks and stationery. It further argued that in terms of the Constitution, whilst every person has a right to a basic State funded education, no person has a right to education at a private institution.The school further denied that there is a tacit term in the contract that requires the school to provide textbooks and stationery. The court held that;

“It is therefore clear, from the aforegoing, that school fees charged by different schools do not necessarily include a textbook and stationery fee.  The onus was on the appellant to prove, a quo, that the provision of textbooks and stationery is an implied term of the contract.  The fact that some schools include textbooks and stationery in the school fees that they charge does not necessarily mean that the same applies to all schools. Nor does it constitute an implied term that a school is obliged to supply textbooks and stationery once a pupil has paid the school fees charged by the school.”

The onus to prove existence of a tacit or implied term of a contract is very heavy and cannot be lightly discharged. It lies on the person alleging existence of the implied term of the contract. It is important that parties to a contract strive to exhaustively express all terms of the contract to avoid parties resorting to implied terms of contract which are outside the contract and will most certainly torch disputes.

The contents of this article are for general information purposes only and do not constitute our legal or professional advice. We accept no responsibility for any loss or damage of whatsoever nature which may arise from reliance on any of the information published herein.

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