When parties enter into a contract it is virtually impossible for them to include express terms to cover every eventuality. Explain the circumstances under which: (i) The...

When parties enter into a contract it is virtually impossible for them to include express
terms to cover every eventuality. Explain the circumstances under which:
(i) The courts
(ii) The statutes
Will imply terms into the contract.

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,
- Exists
- 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 Conditions
- 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.

Warranties
- Quiet possession: the buyer shall have and enjoy quiet possession.
- Free from charge or encumbrance: the goods shall be free from any charge or encumbrance.
- 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.

Warranties
- Quiet possession: the hirer shall have and enjoy quiet possession
- Free from charge or encumbrance: the goods shall be free from any charge or encumbrance in favour of a 3rd party.

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raphael answered the question on April 16, 2018 at 06:53

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