7.3 Express Terms, Incorporation, Implication and Variation

Formation tells you that a contract exists. Terms tell you what the parties actually promised. The September 2026 FLK1 specification groups express terms, incorporation, terms implied by common law and statute, and variation. Classification of conditions, warranties, and innominate terms, and the interpretation exercise that gives words their meaning, are taught in the next section. Keep those later questions off this page until you know which words got into the contract, and whether a later deal validly changed them.

Independent OpenExamPrep coverage of this heading follows the order a solicitor uses on a commercial or consumer file: what was said or written; did those words become terms; what does the law add; and did a later variation bite?

Express terms and the statement that is only a representation

Not every pre-contract statement is a term. A term is a promise that forms part of the bargain. A representation is a statement that induces the contract but is not guaranteed as part of it. The distinction matters because the remedies differ: breach of term sounds in contract; a false representation is a vitiating factor (misrepresentation) taught elsewhere in Contract. Functioning-knowledge factors, drawn from Heilbut, Symons and Co v Buckleton, Oscar Chess v Williams, Dick Bentley Productions v Harold Smith (Motors), and Routledge v McKay, include:

• the importance of the statement to the bargain;
• the interval between statement and contract;
• whether the maker had special knowledge or invited reliance;
• whether the statement was reduced to writing in the later document.

A dealer who states a fact within their trade knowledge is more readily found to have promised it (Dick Bentley). A private seller who passes on a logbook date is often only representing (Oscar Chess). An entire agreement clause says the written contract contains the whole bargain. Inntrepreneur Pub Co v East Crown is the name of the clause's ordinary effect on collateral warranties, but it does not by itself exclude liability for misrepresentation; that needs a separate, and then statutory, analysis.

The parol evidence rule is a starting point, not a wall: the parties cannot usually add to, vary, or contradict a document intended as the complete contract by oral evidence of prior statements. Exceptions include proving a collateral contract, showing the document is not the whole agreement, rectification, and proving an implied term. Do not use parol evidence as a reason to ignore incorporation or implication.

Incorporation: signature, notice, and course of dealing

A term is useless if it never got in.

Signature. A person who signs a contractual document is generally bound by its terms even if they have not read them: L'Estrange v Graucob. The main common-law escapes are non est factum (a fundamentally different document, with no negligence) and misrepresentation about the document's contents (Curtis v Chemical Cleaning). Signature remains the strongest incorporation route on FLK files. 'I did not read it' is not a defence.

Reasonable notice. Unsigned terms, including ticket cases and website processes that are not wet-ink signed, must be brought to the other party's attention before or at the time of contracting. Notice after the contract is formed is too late: Olley v Marlborough Court. The more onerous or unusual the clause, the more explicit the notice must be. Parker v South Eastern Railway is the basic ticket-notice case. Thornton v Shoe Lane Parking is the name of the rule that a clause cannot be incorporated by a ticket issued after the bargain is struck, especially at an automatic barrier. Interfoto Picture Library v Stiletto Visual Programmes is the name of the red-hand idea: a particularly onerous condition (there, a steep holding fee) needed special notice. Exemption clauses are the usual candidates for that extra spotlight, but Interfoto itself was a charging clause.

Course of dealing. Regular, consistent previous contracts on the same terms can incorporate those terms into a later deal even if the current paperwork is imperfect: McCutcheon v David MacBrayne; Hollier v Rambler Motors (three or four dealings in five years was not enough); British Crane Hire v Ipswich Plant Hire (common industry terms between parties of equal bargaining power). Consistency matters more than a long but chaotic history.

On-screen contracting uses the same ideas. Displaying terms behind a link the customer never had a fair chance to see, after the pay-now click, is an Olley problem. A clear click-wrap process before payment is closer to signature and notice.

Implication at common law and by statute

Implied in fact. The court may imply a term to fill a gap in a particular contract if it is necessary to give business efficacy (The Moorcock) or so obvious that the officious bystander would say 'of course' (Shirlaw v Southern Foundries). Marks and Spencer v BNP Paribas Securities Services is the modern name of the rule: implication is a strict, after-construction exercise; the court will not imply a term merely because it is fair, reasonable, or would improve the bargain. Lord Hoffmann's suggestion in Attorney General of Belize v Belize Telecom that implication is just interpretation was rowed back. Wells v Devani shows that a contract can still be found, and a term implied, where the parties intended to be bound and the gap can be filled by necessity, but it is not a licence to rewrite.

The BP Refinery five-factor list (reasonable and equitable; necessary for business efficacy; so obvious it goes without saying; capable of clear expression; not contradictory of express terms) is still cited, but Marks and Spencer warns against treating reasonableness as a free-standing test.

Implied in law. Some terms are incidents of a recognised type of contract. Liverpool City Council v Irwin implied an obligation on a landlord to take reasonable care of common parts, as a legal incident of that relationship, not as a one-off business-efficacy patch.

Custom. A custom that is certain, notorious, and reasonable, and that does not contradict the written bargain, may be implied: Hutton v Warren.

Statute — business to business. In a sale of goods between traders, the Sale of Goods Act 1979 still implies terms as to title (s.12), correspondence with description (s.13), satisfactory quality (s.14(2)), fitness for a particular purpose (s.14(3)), and correspondence with sample (s.15). The Supply of Goods and Services Act 1982 implies similar terms for some transfers of goods and, for services, that the supplier will carry out the service with reasonable care and skill (s.13), within a reasonable time (s.14), and for a reasonable charge if none is fixed (s.15). These B2B implied terms can be excluded or limited only so far as the Unfair Contract Terms Act 1977 allows — taught with exemption clauses in the next section. Title (SGA 1979 s.12) cannot be excluded.

Statute — consumers. For a consumer contract, the Consumer Rights Act 2015 is the source. Goods must be of satisfactory quality, fit for a particular purpose, and as described (ss.9–11), with additional rules on installation, digital content, and matching a sample or model. Digital content has its own quality, fitness, and description terms (ss.34–36). Services must be performed with reasonable care and skill (s.49), for a reasonable price if none is agreed (s.51), and within a reasonable time (s.52). Sections 31, 47, and 57 prevent a trader from excluding those statutory rights. Do not apply the 1979 Act as the primary implied-term source in a consumer goods file after 1 October 2015.

Variation

A contract, once formed, does not freeze forever. The parties may vary it, but a variation is itself a contract: it needs agreement, consideration (or a deed), and sufficient certainty. Doing what one is already bound to do raises the same Stilk / Williams v Roffey / Foakes v Beer issues as formation. A promise to pay more for the same work may be supported by practical benefit; a promise to accept less of a debt generally is not, unless there is fresh consideration, a deed, or a promissory estoppel that suspends enforcement.

No oral modification (NOM) clauses are now a first-rank FLK point. In Rock Advertising Ltd v MWB Business Exchange Centres Ltd the Supreme Court held that where the contract says it may not be varied except in writing (or in writing and signed), that clause is generally effective. A later oral variation that does not comply is usually not binding. That reasoning protects commercial certainty. An estoppel may still arise if one party represents that the formality can be ignored and the other relies, but the estoppel must be made out on the facts; it is not an automatic escape. Do not advise that the later conversation always wins.

A variation is different from a waiver or election, which may be unilateral and may not need consideration in the same way, and different from a collateral contract, which sits beside the main agreement. On a file, name the mechanism before you reach for Roffey or Rock Advertising.

Work express terms and incorporation first, implication second, variation third. A beautifully implied term cannot rescue a clause that was never incorporated. A conversation after the event cannot rewrite a NOM clause unless the Rock Advertising limits are respected.