What are implied terms in contracting?

Implied terms is an important concept to be aware of, precisely because you won’t see these terms expressly written in an agreement yet are they still legally binding. As the name suggests, they are implied. 

The application of implied terms changes per jurisdiction. Under Dutch law they can arise from statute, reasonableness and fairness, or convention, as codified in the Dutch ‘Burgerlijk Wetboek’ (Civil Code). We will explore the articles and some empirical examples below. 

What are examples of implied terms in Dutch law?

You can find several articles in Dutch law that reference the concept of implied terms, for example:

• Article 6:248 BW states that a contract has not only the effects agreed upon by the parties but also those that follow from law, usage, or the requirements of reasonableness and fairness.
• Article 6:2 paragraph 1 BW requires parties to act toward each other in accordance with the principles of reasonableness and fairness.
• Article 3:35 BW allows for legal consequences based on legitimate expectations, even in the absence of explicit agreements.

Dutch case law examples

• Haviltex (Dutch Supreme Court, 13 March 1981, NJ 1981/635)
  This landmark case is frequently referenced on the topic of interpretation of reasonableness in a contract. With this case it was established that interpreting a contract depends not only on the wording but also on what parties could reasonably expect from each other, opening the door to implied terms based on context.
• Lundiform/Mexx (HR 5 April 2013, ECLI:NL:HR:2013:BY8101)
  Confirmed that even with professionally drafted contracts, the context and mutual intentions of the parties are decisive, again supporting the role of implied terms.
• Saladin/HBU (HR 19 May 1967, NJ 1967/261)
  Emphasised that the application of general terms can be restricted by principles of reasonableness and fairness.

Implied terms are important because it is not possible for contracts to cover absolutely every scenario. It makes sense that parties, on the basis of their agreements and the general laws, can have certain expectations without needing to write them out.

Why this matters in contract management

For in-house legal counsel and contract managers, understanding implied terms is of critical importance. They can:

• Introduce obligations or rights not explicitly negotiated;
• Be invoked in disputes when a contract is silent or ambiguous;
• Increase legal risk if contracts lack clarity or completeness.
  
  

With a CLM solution like Docfield, more terms can be made explicit, reducing reliance on interpretive legal language and improving contract control, consistency, and enforceability. 

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