When it comes to business agreements, the terms of a contract are crucial. A contract is a legally binding agreement that outlines the rights and responsibilities of each party involved. The terms of a contract are the specific details of the agreement between the parties.
In law, terms of contract are broken down into two categories: express terms and implied terms.
Express terms of a contract are those that are explicitly stated and agreed upon by the parties involved. These terms can be in writing, verbal, or even implied by conduct. They can be conditions, warranties, or innominate terms.
Conditions are essential terms that are fundamental to the contract. They must be satisfied for the contract to be enforceable. For example, if a company agrees to deliver goods to another company by a specific date, but fails to do so, the contract can be terminated.
Warranties are less critical terms that are not essential to the contract but are important to the parties involved. If a warranty is breached, the injured party can sue for damages but cannot terminate the contract.
Innominate terms are terms that are not clearly conditions or warranties and their breach can lead to different consequences depending on the severity of the breach.
Implied terms are those that are not explicitly stated in the contract but are necessary to give effect to the contract`s intentions. These terms can be either implied by law or by fact.
Terms implied by law are those that are assumed to be a part of the contract by law. They are necessary to make the contract workable and fair. For example, if a person hires a builder to carry out construction work on their property, the law implies that the builder will carry out the work with reasonable care and skill.
Terms implied by fact are those that are not specifically mentioned in the contract but are necessary to give effect to the contract`s intentions. For example, if a person hires a taxi to take them to the airport, it is implied that the taxi driver will take the shortest and safest route.
In conclusion, understanding the terms of a contract is fundamental to any business agreement. In case of any dispute, it is necessary to know the terms of the contract to determine the next steps. Therefore, it is essential to consult a legal expert to ensure that the terms of a contract are comprehensive and clearly defined.