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Cohen, George M. --- "Interpretation and Implied Terms in Contract Law" [2011] ELECD 125; in De Geest, Gerrit (ed), "Contract Law and Economics" (Edward Elgar Publishing, 2011)

Book Title: Contract Law and Economics

Editor(s): De Geest, Gerrit

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781847206008

Section: Chapter 8

Section Title: Interpretation and Implied Terms in Contract Law

Author(s): Cohen, George M.

Number of pages: 28

Extract:

8 Interpretation and implied terms in
contract law
George M. Cohen


1. Introduction and Scope
Questions of how courts interpret, and should interpret, contract terms
and when courts imply, and should imply, terms to which the contracting
parties have not explicitly agreed loom large in contract disputes and in
the legal literature on contract law. In the last decade, these questions have
received increased attention from law and economics scholars.
Contract law draws a distinction between interpretation and implied
terms, as well as between these doctrines and other contract law doctrines.
Interpretation refers to the process by which courts ascertain the meaning
of express terms. Implied terms are those that courts deem to be part of the
contract even though the parties did not expressly agree to them. Implied
terms are sometimes used to `fill gaps' that parties have left in their con-
tracts, such as when parties leave out the time of performance and courts
read in a reasonable time term. Implied terms can also refer to terms that
limit the application of existing terms, the most notable example being
the doctrine of good faith. Interpretation and implied terms are closely
related concepts. For example, if the question is whether to read in an
exception to an express term, such as a price or quantity term, that could
be viewed either as an act of interpreting the express term or of implying
an additional term (the exception). Similarly, if a contract contains a `best
efforts' clause, determining what that ...