Implied Terms

Posted in Human Resources Terms, Total Reads: 2177

Definition: Implied Terms

A contract might include written or oral terms as well as some implied terms which are not mentioned in writing in the contract nor are informed orally by the supervisor. However, these terms are an integral part of the contract of employment and any breach can have negative consequences.

Some implied terms

a) Be honest in any dealings and be loyal to the employer

b) The employer must provide a safe and secure environment for the employee

c) An employer should trust the employee and vice versa

d) Any term that needs no explanation – e.g. stealing from the employer will result in termination of the employment and attract legal action

e) Any terms that are necessary to fulfil the terms of a contract – e.g. a driver needs to hold a valid driving licence

Some of the most interesting examples of implied terms can be found in a factory. Take the example of company ABC – a steel-manufacturing company. Every Diwali, since the last 50 years, the employer provided sweets from M.M. Mithaiwala, a premium sweetshop in Mumbai. However, because of the economic downturn in the current year, the company had to cut costs and therefore provided sweets from Thakkar Sweets, a local sweetshop. However, because the employer had provided sweets from M.M. Mithaiwala over the last 50 years, it was a custom and became one of the implied terms every Diwali. Another real life example is about a factory whose workers were barred from entering the premises from a particular gate, which was open to them for more than 20 years, because the management decided to allot that gate for entry of managers and senior managers. The workers went on strike giving the reason of implied terms.


Hence, this concludes the definition of Implied Terms along with its overview.

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