Courts of law imply terms into contracts when called upon to do so by either party.
However, they do so reluctantly. This is because the parties are responsible for drawing the contractual map. A contract ought to be self sufficient in its terms. Courts imply terms into contracts for two reasons:
• To give effect to the intention of the parties
• To give business efficacy i.e. facilitate commercial transactions.
Courts of law imply terms in contracts from trade usage or custom and by applying the reasonable by stander test.
Trade usage or custom
A court of law may imply a trade usage or custom into a contract if it is satisfied that the usage or custom,
• Is certain
• Is reasonable
• Is known by the parties
• Had not expressly or impliedly been excluded or exempted from the contract by the parties. It was so held in Harilal Shah and Champion Shah V. Standard Bank Co. Ltd.
In Fluery and King V. Mohammed Wali and Another the court implied a custom into the transaction and held that the plaintiff was entitled to a reduction in the purchase price.
• Reasonable by stander test
A court of law will imply a term into a court if a reasonable person over hearing the contract being made would imply the same. In The Moorcock Case (1888),: the defendant who owned a jetty situated upstream river Thames agreed that the plaintiffs could unload at the jetty. During low tide, as the ship moved towards the jetty, it grounded on the river bed and was damaged. The plaintiff sued for damages. It was held that the jetty owner was liable. The court implied the term that the passage to the jetty ought to have been reasonably safe for the ship. In Hassan Ali Issa V. Jeraji produce shop the court implied the term that where a repaired item is not collected within a reasonable time, the party undertaking the storage is entitled to reasonable storage charges.
(ii) The Sale of Goods Act, Cap 31 implies both conditions and warranties in sale of goods contract. The Hire Purchase Act, Cap 507 implies conditions and warranties in hire purchase agreement. Terms implied by the Sale of Goods Act
Right to sell: the seller shall have the right to sell
Correspond to description: the goods shall correspond to the description
Fitness for purpose: the goods shall be reasonably fit for the specific purpose.
Merchantable quality: the good shall be of merchantable quality
Sale of sample: the bulk shall correspond to the sample
Trade usage or custom: a condition may be implied by trade usage or custom.
Quiet possession: the buyer shall have and enjoy quiet possession.
Free from charge or encumbrance: the goods shall be free from any charge orencumbrance.
Trade usage or custom: a warranty may be implied by trade usage or custom.
The Hire Purchase Act implies the following conditions in all hire purchase agreements
Right to sell: the owner will have the right to sell the goods when property is to pass.
Fitness of purpose: the goods will be reasonably fit for the specific purpose.
Merchantable quality: the goods will be of merchantable quality.
Quiet possession: the hirer shall have and enjoy quiet possession
Free from charge or encumbrance: the goods shall be free from any charge orencumbrance in favour of a 3rd party.