IMPLICATION IN FACT AS AN INSTANCE OF CONTRACTUAL INTERPRETATION

Abstract

This article seeks to analyse the part of interpreting contractual documents that deals with supplementing the (linguistically encoded part of the) contract, and it is argued that the implication of terms in fact is an instance of this interpretation by supplementation. A reason for the strictness of the implication in fact test, as contrasted with the basic objective test of interpretation, is proposed: some information (new terms) is more primary than other information (details added to existing terms), and such primary information is less likely to be intended to go without saying by the contractors. As a result, although implication in fact should be seen as an instance of interpretation, interpretation through supplementation should take account of the primariness of the information by which the contract is being supplemented. To put things another way, the strict officious bystander and business efficacy tests of implication should be seen as at the strict extreme of a continuum of tests of interpretation by supplementation.