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28 May 2020

Implied terms - the return of the officious bystander


Salvador Dali once said “Have no fear of perfection - you'll never reach it.”

While we doubt that he had in mind either sophisticated contracting parties or their busy lawyers they – like everyone - can sometimes fail to cover every contingency in their planning and drafting.  When that happens disputes often arise and the courts will then need to construe the express words of the agreement, and if it is still not possible to ascertain the meaning, the court may then be willing to imply certain terms.

In practice the situations in which courts are prepared to imply a term into an agreement are limited. This briefing examines a case where the Hong Kong court considered and addressed an unusual position in relation to a trading contract and then clarified the parties’ legal position by implying a term.

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