Whenever creating workplace contracts, you may come across all types of legal terms.
Express and implied terms are two examples that vary in the description but are equally substantial.
Whether you’re making an agreement with a potential employee or contractor, you must use terms appropriately. If not, you could breach contracts–resulting in costly penalties and business damages.
In this guide, we’ll look at what express and implied terms are, Ireland’s law on legal agreements, and things to remember when creating contracts.
What is an express term?
An express term is a condition that is a specific aspect agreed to by you and an employee. They can be presented verbally or in writing–through contracts and handbooks.
In the workplace, express contracts are generally used for outlining:
These contractual terms are used when legal documentation is needed. It ensures both parties comply with the agreement or risk facing legal consequences.
What is an implied term?
Implied terms are conditions that aren’t agreed upon vocally or written down–they’re generally presumed.
They might be required because of legal duty or ethical obligations. Or they may be part of customs and practices in the workplace.
Implied contracts are generally used when you and your employees must follow:
- A duty of trust and care: Protect against any harm or damage (physically, mentally, and emotionally).
- A duty of confidentiality: Provide means for security (for staff and the business).
- A duty of loyalty: Loyalty to the business (only whilst underemployment).
What is the difference between express and implied terms?
The main difference between them falls under legal and ethical interpretation.
Implied terms are subject to trust from both parties in a business contract. Whereas express terms are specifically outlined and acknowledged by both sides.
Express contracts are easier to enforce than implied ones. Simply because most of them are documented and will have been signed by both parties.
Legal tests for implying terms in a contract
Implied and express terms, in contractual law, are legally binding in Ireland. Meaning, a breach of implied contract or express terms can result in legal damages and penalties.
Express terms are generally more straightforward when adding to contracts. If you want to use implied terms in employment contracts, they must pass several legal tests first. These include:
Customs and practice
These are reasonable work customs that are acknowledged by others. For example, wanting to legally implement a custom of sharing Christmas bonuses with all staff members.
These rules are obvious and necessary and are needed for the efficiency of the business. For example, employees who want to borrow company cars must have drivers’ licences.
Officious bystander test
This is when something is considered so obvious, that it generally ‘goes without saying’. It can even be acknowledged by a bystander who’s impartial to the practice. For example, not stealing money from the business.
Conduct of the parties
This is a term used when changes are needed after both parties have signed a contract. For example, if an employee has recently become a mother, you may want to introduce new contractual terms on maternity benefits.
Terms implied by the law
This is when the governing laws of the country compel you to amend contracts. For example, contracts may have to be changed to comply with new laws passed on statutory sick pay.
Things to remember when creating express and implied contracts
When creating and using contracts, you must follow the appropriate legal steps. By complying with them, you can protect your business and employees from potential disputes and claims.
Here are things to remember when creating express and implied contracts:
- Ensure employment contracts are clearly drafted and contain all relevant details for the job.
- Always try to document any agreements made between employees, contractors, or customers.
- If you want to exclude implied terms altogether, you need to gain consent through an express contract.
Being thorough at this stage protects you from potential disputes in the future. And it’ll also provide both parties time to adjust and change contractual terms if they wish.
What if implied and express terms of a contract conflict?
In some situations, these two terms may clash–leaving you with a legal predicament to deal with.
In judicial cases, express terms of a contract will generally overcome implied terms. However, they can happen in reverse if:
- An express term needs to remain confidential.
- A workplace practice contradicts an express term.
- An implied term is indicated by the law.
Get expert guidance on express and implied terms with Peninsula
In most cases, it’s essential to provide some form of employment contract to your staff members.
They demonstrate your legal and moral duties to them. And they also reassure employees of their legal rights, benefits, and entitlements.
If you wrongfully provide these rights, you could indirectly breach terms–resulting in costly penalties and business damage.
Peninsula offers expert guidance on express and implied terms. Our clients get access to 24-hour HR advice, which can guide you through legal rules for contract amendments.
Get in touch today, or use our callback form to arrange a more convenient time. Call us on 0800 028 2420