A written contract is a great start for doing business, but does yours do everything you need it to? Under English Law, the terms of a contract needn’t be in written form and, where a contract is silent about specific issues, you could be at risk of terms being implied by law or custom and practice.
It can be beneficial to rely on implied terms, particularly if they suit your contracting position and you want to keep your terms brief to avoid extensive negotiations. To take full advantage though, you need to be able to understand what terms might be implied. If, however, you are not aware of the terms that might be implied, you could be exposing your business to unwanted risk.
So how do implied terms work? Basically, as the name suggests, if a contract is silent on certain areas, terms may be implied in order to fill gaps or add sense to a contract. This can be as simple as dealing with interest on late payments to more complex arrangements regarding the apportionment of liability. It may be that terms commonly found in similar contracts are added.
Generally, an issue with implied terms will not come to light until something has gone wrong with a contract, by which time it may be too late. Be proactive - analyse your terms to check they say what you want them to and don’t expose you to a greater risk than is necessary.
If you want to your terms reviewing to reduce your risk, get in touch with Punk Legal. We can offer a reasonably priced review to make sure you stay on top of contract risks.