What do implied terms in a contract refer to?

Implied terms in a contract refer to terms that are understood by the parties involved but are not explicitly stated in the written agreement. These terms are essential for the contract to function effectively and can arise from various sources, such as the nature of the relationship between the parties, customary practices within an industry, or statutory obligations.

For example, in many business contracts, it is implied that goods supplied will be of satisfactory quality, even if this is not written in the contract itself. This concept ensures that the contract is fair and reflects the true intentions of the parties, filling in gaps where the wording may be insufficient. Recognizing implied terms is crucial for interpreting contracts and understanding the responsibilities and rights of each party in a legal context.

The other options, while related to contract terms, do not accurately capture the essence of implied terms. Explicit terms are those clearly defined and written into the contract, modified terms refer to changes that parties can agree on during the contract's life, and terms required by international law pertain to specific legal obligations that govern international agreements.