Stay in control OF YOUR BUSINESS
Don’t let your contracts fall foul of the law. Cathryn Culverhouse, Solicitor at law firm DMH Stallard, Guildford, explains why it’s important to review any implied terms at the outset of a business agreement implied terms in your contract and expressly exclude them. Planning ahead and accounting for implied terms at the contractual stage helps you to reduce risk to your business and ensure that your contract covers you in the way you expect it to. So, how do implied terms come into play?
Cathryn Culverhouse
W
e all start with the best intentions and, in many cases, business agreements run smoothly. However, if you are involved in negotiating an agreement, it pays to review at the outset any terms likely to be implied by the Court should things not go to plan. Implied terms are terms that do not expressly feature in your contract, but that you are likely to be legally bound by should a dispute arise between you and the other party. Implied terms can cause uncertainty but there are steps that you can take to minimise this for your business. For example, you could make a decision not to be bound by
You may believe that all statements made by you or the other party during the course of your negotiations will become legally binding, whether or not these have been included in the contract. This is not the case. If a dispute arises, the Court will look at a number of things in order to decide if a verbal statement should effectively be treated as a contractual term. This includes seeking an understanding of what your intentions were in relation to the statement, the importance of the statement in question, when it was made and whether it was known to be true. Only significant statements or those that are key to the contract will become terms which, if breached, will give rise to damages. Additionally, it’s important to know that the Court can imply a range of other terms, including:
“PLANNING AHEAD AND ACCOUNTING FOR IMPLIED TERMS AT THE CONTRACTUAL STAGE HELPS YOU TO REDUCE RISK TO YOUR BUSINESS AND ENSURE THAT YOUR CONTRACT COVERS YOU IN THE WAY YOU EXPECT IT TO”
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SURREY BUSINESS
1. Terms implied by fact The Court may imply terms to reflect the intentions of the parties in each situation. These are amongst the most common terms implied.
