Judicial Understanding of the Contract of Employment

Abstract

performance of the contract stems from the courts' understanding of implied terms as default rules. As long as implied terms are restricted in their ambit by the supposition that they must qualify as terms which would have been agreed in the absence of transaction costs, then the rugged individualist image of parties being reluctant to concede any additional obligations will prevent the development of implied duties of co-operation. But there are many contrary instances of the courts defining a broader scope for implied terms based upon such concerns as a fair allocation of risk or the promotion of successfil performance of contracts. As the cases involving the contract of employment illustrate, these concerns can generate an implied duty to disclose information during the performance of contracts. Perhaps these cases indicate the potential for the development of a more general principle requiring disclosure of information throughout the law of contracts.