Implied terms are provisions that are not explicitly stated in a contract in Cameroon but are legally binding, filling in gaps based on statute, custom, court decisions, or the obvious intention of the parties. They can be implied by statute (e.g., consumer protection laws), custom and practice (e.g., a regular payment date), or because they are necessary for the contract to function (e.g., a driver needs a license) or are so obvious that they "go without saying".
As express terms are laid down by the parties, further terms may in some circumstances be read into contracts by the courts. These implied terms maybe divided into four groups: terms implied in fact; terms implied in law; terms implied by custom; terms implied by trade usage.
Terms implied in fact
These are terms not laid down in the contract, but which it is assumed both parties would have intended to include if they had thought about it- they may be left out by mistake, or because one or both parties thought them so obvious that they did not need to be spelt out.
Terms implied by law
These are terms which the law dictates must be present in certain types of contracts, in some cases, regardless of whether or not the parties want them.
Terms implied by custom
Terms can be implied into a contract if there is evidence that under local custom they would normally be there. This was illustrated in the case of Smith v Wilson (1832).
Terms implied by trade usage
Where a term would routinely be part of a contract made by parties involved in a particular trade or business, such a term may be implied by the courts.
Key characteristics of implied terms
They are not written or verbally agreed upon, but are legally binding.
They fill in gaps where the contract is silent or vague.
They cannot contradict any express (stated) terms of the contract.
They must be reasonable, necessary, and capable of clear expression.
BENEFITS OF IMPLIED CONTRACT TERMS
Reliance on implied contract terms is one way to economize on these types of transaction costs. Implied contract terms allow the parties to skip over negotiating or writing certain terms in their contracts because they are legally assumed implicitly when the contract is entered into. This relieves the contracting parties of both the immediate cost of contracting over these terms and the fear that in the future a dispute will arise over them if they are not made explicit in the contract.
This benefits both parties in that it allows them to instead focus their attention on other aspects of the contract or to reduce the overall transaction cost of the contract. In turn, this benefits society as a whole because reducing transaction costs allows a greater number of economically efficient transactions to occur, which might otherwise be forgone if the transaction costs were higher.