What are the differences between terms expressly stated, implied terms and tacit terms?
- A contract is constituted by terms that determine the rights and obligations of the parties to the contract manifesting their common intention. These terms are often expressly stated. Sometimes terms are imported by law into the contract as implied terms that are used, said the court in Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A), at 531, ‘to describe an unexpressed provision of the contract which the law imports therein, generally as a matter of course, without reference to the actual intention of the parties’.
- In addition to implied terms, there are terms that are inferred from the common intention of the parties and surrounding circumstances and are referred to as tacit terms.
- In City of Cape Town (CMC Administration) v Bourbon-Leftley and Another NNO 2006 (3) SA 488 (SCA), at paragraph [19], the appeal court remarked that:
‘a tacit term is based on an inference of what both parties must or would necessarily have agreed to, but which, for some reason or other, remained unexpressed’.
- Brand JA, in Scholtz v Scholtz 2012 (5) SA 230 (SCA); [2012] 2 All SA 553 (SCA), noted:
‘Tacit terms … are by definition … neither recorded nor expressly agreed upon by the parties. They often pertain to matters which the parties do not even consider.’
- When considering the existence of a tacit term, the court usually applies the so-called ‘bystander test’ (adopted by our courts from the English case of Reigate v Union Manufacturing Co (Ramsbottom) Ltd and Elton Cap Dying Co Ltd [1918] 1 KB 592).
- This was explained by Wallis AJA in SA Maritime Safety Authority v McKenzie 2010 (3) SA 601 (SCA); (2010) 31 ILJ 529 (SCA), at paragraph [12]:
‘In our law as it stands at present the usual test for the existence of a tacit term is that of the interfering bystander who asks what is to happen in the particular situation and receives the answer: “Of course X will be the position. It is too obvious for us to say so”.’
- Nienaber JA in Wilkins NO v Voges 1994 (3) SA 130 (A), at 137A-C, wrote:
‘The practical test for determining what the parties would necessarily have agreed on the issue in dispute is the celebrated bystander test. Since one may assume that the parties to a commercial contract are intent on concluding a contract which functions efficiently, a term will readily be imported into a contract if it is necessary to ensure its business efficacy.’
