Express Or Implied? Clarification On Implied Terms In Construction Contracts

Insufficient thought is often given to implied terms when parties enter into construction contracts. So much time and effort is put into ensuring that all the necessary express terms are incorporated that parties often neglect the fact that many terms are implied anyway and that some of those implied terms can't be contracted out of.

Generally speaking, there are two ways in which terms can be implied into a contract: either by statute or by common law.

Terms implied by statute The following terms are implied by statute:

  1. The Local Democracy, Economic Development and Construction Act 2009 implies into a construction contract the payment provisions from the Scheme for Construction Contracts unless it already contains an "adequate mechanism" for determining what payments become due and when. Likewise the right to refer a dispute arising under the contract to adjudication.

  2. The Late Payment of Commercial Debts (Interest) Act 1998 implies into a contract the right to interest on late payments at the rate of 8% over base unless it already contains a "substantial contractual remedy for late payment".

  3. The Contracts (Rights of Third Parties) Act 1999 implies into a contract a right for a third party to enforce a contractual term provided that the contract expressly provides for it.

  4. The Supply of Goods and Services Act 1982 implies into a contract terms that goods supplied will be of satisfactory quality, and that services will be provided with reasonable skill and care and within a reasonable time. Similar terms are also implied by common law.

  5. The Defective Premises Act 1972 implies into a contract for the provision of a new dwelling a term that the dwelling, when completed, will be reasonably fit for human habitation.

    Terms implied by common law The following terms have been found to be implied by common law:

  6. That a supplier of professional services will use the care and skill to be expected of an ordinarily competent and experienced member of his profession.

  7. That goods and materials supplied will be of good quality and reasonably fit for their purpose. 3. That the employer will give the contractor possession of the site within a reasonable time. 4. That the employer will cooperate so as to enable the contractor to carry out the works in a regular and orderly manner and not hinder or prevent him from so doing. 5. That the contractor will carry out the works in a good and workmanlike manner. Interestingly, however, the following...

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