Implied terms These are terms not expressed in words but incorporated into the contract by operation of the law or trade usage Implied terms that are included in contracts of a specific type are known as the naturalia of that type of contract Terms can also be implied by trade usage if it is so universal and notorious that a party’s knowledge and intention to be bound by it can be presumed Essentialia These essential terms identify the contract as being a certain kind of contract, for example a contract of sale Once the essentialia identify the particular contract, then the relevant naturalia for that contract follow unless excluded by the parties Naturalia These terms are automatically incorporated into the contract as implied terms, unless they are excluded by the parties to the particular contract e.g. In the contract of sale, the warranty against latent defects forms part of the contract unless expressly excluded Incidentalia These special terms serve two purposes: They allow the parties to add special provisions not provided for by the essentialia and naturalia They allow parties to exclude or alter the naturalia to suit their particular needs E.g. a clause that specifies that he goods bought must be delivered by train The Condition A condition can be described as a contractual term, which renders the operation and consequences dependent on the occurrence, or non-occurrence of a specified uncertain future event . The event must be specified: there must be no doubt which event will render the obligations operative or terminate them.
The event must also be uncertain: it must be uncertain whether the event will indeed occur The condition must refer to a future event The suspensive condition The operation of the contractual obligations in terms of the contract are suspended until the condition has been fulfilled Although conditional, the rights and duties exist. If this future event does not take place, the condition is not fulfilled and the contractual obligations do not become operative and are terminated E.g. Andy and Bill agree that Andy will buy Bills car on condition that Andy’s sister gives him the money to pay the price. The resolutive condition This renders the continued existence of the contract dependent on the occurrence or non-occurrence of a specified uncertain future event. If an agreement contains a resolutive condition, a binding contract comes into existence immediately upon the conclusion of the contract and the contractual rights and duties become operative and are immediately enforceable. If the condition is fulfilled, the contract is dissolved and the contractual rights and duties cease to exist E.g. Carl agrees to let his house to David indefinitely, on a monthly basis, on condition that if Carl gets married, it must be returned to Carl. When Carl gets married, the house must be returned to Carl, but the money that David paid in rental for the completed period will not get repaid to David.
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