Express and implied terms in construction contracts

Revision as of 16:43, 4 January 2020

Terms

The rights and obligations of parties to a contract are defined by its terms.

Express Terms

Express terms are those that have been explicitly agreed by both parties and can be oral or in writing. However, the express terms do not necessarily constitute all the relevant terms of the agreement.

Implied Terms

In certain circumstances the courts are prepared to imply terms into a contract provided such terms are necessary to give business efficacy to the agreement.

Implied by statue (written legislation) :

Supply of Goods and Services Act 1982

Section 13 : Service will be provided with reasonable skill and care

Section 14 : The services will be provided within a reasonable time

Section 15 : A reasonable prive will be paid for the services

Examples

The Moorcock (1889) 14 PD 64

The owners of the ship called The Moorcock contracted for space at a wharf owner's jetty in order to unload The Moorcock's cargo. While docked, the tide went down to a point where the hull of the ship hit a ridge, causing damage to the ship. The plaintiff argued that the wharfingers were responsible to ensure that his vessel would remain safe while docked. The wharf owners, in their defense, claimed that there were no provisions in the contract to ensure the vessel's safety and that they could not have foreseen the damage caused to the vessel. The issue before the Court was whether there can be any implied warranty given the circumstances. The trial court found that there was an implied warranty.

The Court held for the ship owner, ruling that there was an implied term that the wharfingers had taken reasonable steps to ascertain the state of the riverbed adjacent to the jetty (not, as often stated, an implied term that the jetty would be a safe place to dock). If the wharfingers had taken such responsibility, then they would have discovered the ridge of rock and would have been under the duty to warn the shipowners of the potential hazard. Failure to warn would have been actionable in tort.

Bowen LJ stated that any implied warranties must be based on the presumed intentions of the parties.

Spurling v Bradshaw [1956] EWCA Civ 3

Implied by previous course of dealings between the parties

Terms may be implied as a matter of law. That is to say they are implied as a matter of policy and are of general application to all contracts. Further terms may be implied as a matter of fact. That is to say as a matter of construction of the presumed intention of the parties to a particular contract. The case of Foley v Classique Coaches Limited (1953) is an illustration of a term being implied as a matter of fact.

Whilst a term will not be implied unless in the particular circumstances of each case it is reasonable to imply such a term, this does not mean that a term will be implied merely because it is reasonable. For example, Trollope & Colls Ltd v North West Metropolitan Regional Hospital Board (1973) where the court refused to imply a term to render a harsh contract more reasonable.

Further, a term will not be implied if it is inconsistent with the express terms of the contract. In Martin Grant & Co Ltd v Sir Lindsay Parkinson & Co Ltd, the Court of Appeal refused to imply a term in a building subcontract:

‘that (a) the [main contractors] would make sufficient work available to the [sub-contractors] to enable them to maintain reasonable progress and to execute their work in an efficient and economic manner; and (b) the main contractors should not hinder or prevent [the sub-contractors] in the execution of the sub-contract works' where the express conditions of the sub-contract provided for a 'beck and call' obligation on the sub-contractor; that is to say the sub-contractor was obliged to carry out his works '... at such time or times and in such manner as the [main contractor] shall direct or require'.

Related articles on Designing Buildings Wiki

• Agency.
• Clause.
• Collateral warranty.
• Construction contract.
• Contract v tort.
• Defective Premises Act.
• Design liability.
• Defective Premises - Liability and Measure of Damages.
• Fitness for purpose.
• Modifying clauses in standard forms of contract.
• Reasonable skill and care.
• Recitals.
• Zennstrom & Anor v Fagot & Ors.