Tacit Terms in South African Contract Law

Definition and Nature of Tacit Terms

A tacit term (also called an implied term in fact) is an unexpressed provision of a contract that is derived from the inferred common intention of the parties. In the leading case of Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A), the court defined a tacit term as “an unexpressed provision of the contract which derives from the common intention of the parties, as inferred by the court from the express terms of the contract and the surrounding circumstances”. In other words, it is a term that the parties intended to form part of their agreement but did not articulate in words. Whether a contract contains such a term is ultimately a question of interpretation and inference.

It is important to distinguish tacit terms from terms implied by law. A tacit term is specific to the particular contract and based on the parties’ intention, whereas an implied term (in the strict sense) is a standardized rule that the law attaches to certain types of contracts unless excluded (for example, statutory or common-law provisions). The courts will not lightly infer a tacit term because doing so risks “making a contract for the parties” beyond their actual agreement. A tacit term cannot contradict the express terms of the contract – it can only fill in gaps or spell out what the contract’s wording leaves unsaid. Especially where the parties have concluded a detailed written agreement intended as the “entire contract,” a court is slow to import a tacit term unless it is truly necessary to give the contract business efficacy. The party alleging a tacit term bears the onus to plead and prove its existence on a balance of probabilities, as discussed below.

Actual vs Imputed Tacit Terms

South African law recognizes that tacit terms may be either actual or imputed. An actual tacit term is one which the parties actually thought about and agreed to, but simply failed to express in words. An imputed tacit term (the more common scenario) is one which the parties would have agreed upon had they foreseen the situation – they never actually considered the matter, but if at the time of contracting an observer brought it up, both would have said “naturally, that goes without saying”. In Wilkins NO v Voges 1994 (3) SA 130 (A), Nienaber JA explained that a tacit term “one so self-evident as to go without saying, can be actual if both parties thought about a matter... but did not bother to declare their assent. It is imputed if they would have assented about such a matter if only they had thought about it”. In either case, because the term was never explicitly stated, its existence is a matter of inference from the contract and context. The inference must be a necessary one – if several different unspoken terms are equally plausible under the circumstances, then none of them can be confidently deemed to have been intended. The party alleging the tacit term must therefore prove the material facts and circumstances from which the necessary inference can be drawn, and the court must be satisfied that both parties shared a tacit understanding on the point.

Determining the Existence of a Tacit Term

The 'Officious Bystander' Test

South African courts typically apply the “officious bystander” test (originating in English law) as a practical tool to decide if a tacit term exists. This test imagines a hypothetical scenario at the time of contracting: if an officious bystander were to interrupt the parties’ negotiations and ask, “What about term X – have you agreed to such a provision?”, the parties would respond, “Yes, of course, that’s so obvious we didn’t bother to mention it.”. If the parties would immediately and unequivocally agree to the suggested term, it is evidence that the term “goes without saying” and can be implied as a tacit term. However, if either party would hesitate or differ – for example, if one would say, “Hmm, we’re not sure about that” or would need to negotiate it – then the term was not tacitly agreed upon. The requirement is that each party would inevitably have provided the same unequivocal answer affirming the term if queried. This stringent standard ensures that courts do not impose a term that one party may never have consented to.

The officious bystander test is essentially an inquiry into the common intention of the parties. It has been “objectified” to some extent, meaning the court considers what reasonable people in the position of the parties would have intended, based on the factual context. In Reigate v Union Manufacturing Co (cited with approval in our courts), the classic formulation was that a term can only be implied if it is “necessary in the business sense to give efficacy to the contract” such that if the bystander asked “what will happen in such case?” the parties would respond “of course, so-and-so will happen; we didn’t bother to say it, it’s too obvious.”. Thus, necessity and obviousness are the core principles – not merely reasonableness or convenience. It is not enough that the term makes good business sense or seems fair; it must be truly necessary to reflect the parties’ intention and to prevent the contract from being ineffective or unworkable. South African courts have repeatedly stressed that the test is a stringent one: “The inference is not whether it is just reasonable or desirable to include the term, but whether the parties necessarily must have intended it given the contractual context”. If the contract, read in context, is efficacious and complete without the proposed term, a court will not imply it. Conversely, if the contract would be inefficacious, absurd, or starkly incomplete without the term, that is strong evidence in favor of a tacit term (provided it meets the “obviousness” test as well).

Inferring Intention from Surrounding Circumstances

Because tacit terms are unspoken, courts look to the surrounding circumstances and the conduct of the parties to infer what unexpressed terms formed part of their agreement. In making this determination, the court will consider all admissible evidence of context: the nature and purpose of the contract, the factual matrix in which it was concluded, the knowledge of the parties at the time, and even their subsequent conduct insofar as it indicates their understanding of the agreement. For example, evidence that both parties acted in a manner consistent with the alleged tacit term (after concluding the contract) can support an inference that they regarded that term as part of their bargain. However, evidence of prior negotiations or secret intentions is generally not admissible to contradict a written contract (per the parol evidence rule), so the court will focus on objective contextual indicators that were part of the shared knowledge of the parties. In City of Tshwane Metropolitan Municipality v Brooklyn Edge (Pty) Ltd [2022] ZASCA 23, the SCA reaffirmed that a tacit term is inferred “primarily from the express terms and the admissible context of the contract”, and “a court will not readily infer a tacit term” unless the inference of common intention is a compelling necessary one.

One preliminary question is whether there is “room” for a tacit term at all. The court will examine the written contract: if the contract’s express provisions already cover the point in issue (even if perhaps inconveniently for one party), or if implying the term would conflict with the contract’s express terms or its integration clause, then no tacit term can be added. As was noted in Pan American World Airways Inc v SA Fire & Accident Insurance Co Ltd and other cases, the first step is to see if the contract’s wording and structure leave a gap or ambiguity on the matter; only if a true omission exists will the court consider filling it by implication. If the contract is silent or ambiguous on a material issue, the court then asks whether, in light of all the surrounding circumstances at contracting, the parties must have intended the proposed term. In making that assessment, factors include: the commercial rationale of the contract, the parties’ respective roles and knowledge, the business efficacy of the transaction without the term, and the subsequent conduct of the parties. Ultimately the court must be satisfied that the most plausible inference from all the proven facts is that both parties assumed the term to be part of their agreement.

South African academic commentary (echoing English authorities) often refers to the tacit term as one that “goes without saying.” If a term truly goes without saying, it means no reasonable contracting parties in those circumstances would have left it out, had they thought about it. Thus the legal standard is high. As Christie puts it, the court in these cases “searches the evidence for manifestations of conduct by the parties that are unequivocally consistent with consensus on the point in question” and looks for the absence of any indication to the contrary. If at the end of that exercise the court is satisfied that the only reasonable inference is that the parties agreed (expressly or tacitly) on the term, then it will be incorporated; if doubt remains or other reasonable inferences cannot be excluded, the tacit term is not established. In summary, the legal standard for importing a tacit term is that of “necessary implication”: the term must be virtually undeniable from the contract and context, such that the parties clearly must have intended it (or would have, had they considered it).

Evidentiary Requirements and Proof of a Tacit Term

Onus and Standard of Proof

The party alleging a tacit term bears a heavy evidentiary burden. The onus (burden of proof) rests on that party to plead and prove the tacit term on a balance of probabilities. In practice, this means the litigant must formulate the tacit term precisely in its pleadings (just as one would plead an express term), and set out the facts and circumstances upon which the inference of that term is based. It must be shown (i) that the contract as actually agreed contains no express term dealing with the point in question (a tacit term cannot override or vary an express term), and (ii) that all the relevant facts point to a common understanding between the parties that the tacit term was part of their deal. Notably, if the alleged tacit term would change the apparent import of the written text, the party must plead the surrounding circumstances that justify such an interpretation. South African courts have held that “solid evidence” is required to support the existence of a tacit term. Because a tacit term by definition was never expressed, it is typically proved by circumstantial evidence, not by direct evidence. The conduct of the parties, their correspondence, industry custom, or other contextual facts often serve as the basis for inferring a tacit term. Importantly, the evidence must be unequivocal – it should point to no other reasonable explanation than the inclusion of the tacit term. If the proven facts are consistent with several interpretations (some not including the tacit term), then the court cannot find that the term was tacitly agreed.

The standard of proof is the usual civil standard (balance of probabilities), but given the nature of tacit terms, courts have cautioned that they will not infer a tacit term unless the evidence is clear and compelling. In Wilkins NO v Voges, for example, the court rejected a proposed tacit term after finding that “not a single compelling reason” had been advanced why the express contract was incomplete without it, and noting that the very fact the term had not surfaced earlier (in pleadings and initial allegations) suggested it was not truly self-evident. Likewise, a tacit term that would impose obligations out of step with the rest of the contract’s scheme or which the parties obviously would have negotiated expressly if intended will be viewed with skepticism. Courts also consider whether the parties “contemplated” the term at all at the time of contracting – if there is no indication they did, a purely consensual tacit term fails, though an imputed term might still be considered under the officious bystander standard. In short, the party asserting a tacit term must convince the court that the term truly formed part of the agreement as understood by both parties, notwithstanding its absence from the written or spoken language of the contract.

Proving a Tacit Term in Action Proceedings

In a trial action (with oral evidence), a tacit term is proved through the normal processes of evidence: witnesses, documents, and cross-examination are used to establish the factual matrix from which the tacit term is inferred. The plaintiff (or defendant, if a tacit term is raised in defense or counterclaim) should lead evidence of the circumstances surrounding the contract’s conclusion — for example, evidence of industry practice, the parties’ prior dealings, their discussions (to the extent admissible), and their subsequent conduct. Because direct testimony that “we agreed to this term” is not available (by definition, the term was not explicitly agreed), the witnesses might instead testify about their understanding or assumptions. Our courts have permitted such evidence as long as it sheds light on objective facts (e.g. one might testify “I proceeded on the assumption that the contract included X, and the other party behaved in a way consistent with X”). The court will evaluate all this evidence and decide, on a preponderance of probabilities, whether the only reasonable conclusion is that the tacit term existed. Notably, the intention is assessed objectively, so even if a party claims subjectively not to have intended the term, the court may still infer that a reasonable person in the parties’ position would have intended it (thereby binding the party). If a tacit term is successfully proved, it has the same legal force as an express term of the contract.

Case law illustrates the evidentiary approach: In Wilkins NO v Voges, a tacit term was alleged as a defense and the trial court insisted on full proof of the term’s existence, breach, and consequences, even though the plaintiff did not participate at trial. The defendant led detailed evidence to show the context of a land sale and the obvious assumption underpinning the deal, which the trial court accepted, but the appellate court ultimately found the inference of a tacit term was not sufficiently necessary and obvious, and overturned the finding. The upshot is that trial courts require cogent evidence: the judge must be “satisfied by the evidence” that the tacit term was part of the contract. Because this can be a complex factual inquiry, it is often risky to rely on a tacit term unless there is strong, uncontested evidence supporting it.

Proving a Tacit Term in Motion Proceedings

Proving a tacit term becomes especially challenging in motion proceedings (application), where the evidence is contained in affidavits and there is no oral testimony or cross-examination. The general rule in motion proceedings is that disputes of fact are resolved in favor of the respondent (the Plascon-Evans rule), and a final order can only be granted if the facts averred by the applicant and admitted (or not disputed) by the respondent justify the relief. Since the existence of a tacit term is a question of inference from facts, a respondent’s denial of the tacit term can easily create a dispute – but our courts have provided guidance on how to handle such situations.

In Hartog v Daly [2023] ZAGPJHC 156 the court explained that merely alleging a tacit term and facing a bald denial does not automatically create a genuine dispute of fact. The dispute must manifest at the level of the underlying facts: in other words, the respondent must dispute the material facts or circumstances from which the tacit term is said to be inferred. If those facts (the contract terms, the context, the parties’ conduct) are materially in conflict, then the inference of a tacit term cannot be decided on paper and the matter should be referred to oral evidence or trial. This is because the court cannot decide between conflicting versions on affidavit about the relevant background or conduct. However, if the essential facts are common cause or accepted (taking the respondent’s version where in conflict, as per motion principles), then the court may consider whether a tacit term can be inferred as a matter of probability from those facts. Uniquely, courts have noted that while ordinarily in motion proceedings one does not resolve matters by weighing probabilities, the inference of a tacit term is a matter of probabilistic reasoning once the facts are settled. Thus, if the facts before the court (even on the respondent’s account) comfortably support the tacit term, the court could find for the applicant on the papers. The key is that the facts giving rise to the inference must not themselves be in dispute.

In practical terms, a litigant who seeks to enforce a tacit term by motion must put forward very clear and uncontested evidence of the surrounding circumstances in the founding affidavit. For example, if correspondence, documents, or the parties’ conduct incontrovertibly demonstrate a shared assumption or undertaking, and the respondent does not meaningfully dispute those facts, the court might infer the tacit term on that uncontroverted matrix. If, however, the respondent simply denies any such common intention, and raises a plausible alternative interpretation of the facts, the court will likely deem the matter incapable of resolution on affidavit. Under Rule 6(5)(g) of the Uniform Rules, the court may then refer the issue to oral evidence or trial for proper ventilation of the facts. Indeed, it is common for disputes about tacit terms to be referred for trial if they cannot be resolved on the papers. For instance, in Parker v Quantum Leap Investments 386 (Pty) Ltd [2024] ZAWCHC 70, the High Court (per Nziweni J) referred a matter to trial because the respondent’s affidavits introduced new factual allegations and defenses inconsistent with the alleged tacit understanding, creating a clear dispute that required oral evidence to resolve.

The approach in Hartog (as approved in subsequent cases) is instructive: “The mere allegation of the existence of a tacit term on the papers and the denial thereof by the respondents does not create a factual dispute in itself, for the simple reason that a tacit term is to be inferred... from the express terms, surrounding circumstances and conduct... The dispute of fact must present itself at the level of the express terms, the surrounding circumstances and the conduct of the parties... If there is a factual dispute at this level, then ... the matter stands to be referred to oral evidence... If no factual dispute has arisen on that level, then the court can consider the probabilities and decide the matter.”. In summary, proving a tacit term on motion is only feasible when the critical factual backdrop is undisputed, allowing the court to comfortably infer the term without needing viva voce evidence. If a respondent’s opposition creates real doubt or factual controversy about the parties’ intention, the court will not grant final relief – the applicant would then need to either accept dismissal of the application or pursue the claim via action proceedings where evidence can be properly tested.

Conclusion

In the South African law of contract, tacit terms serve as an important doctrinal mechanism for giving effect to the true intention of contracting parties in situations where that intention was not expressly recorded. Courts will recognise and enforce a tacit term only if it is satisfied, by careful inference from the contract and surrounding context, that the parties had a common intention (actual or hypothetical) to include that term. The officious bystander test and the necessity for business efficacy are key benchmarks: the term must be so obvious that “it goes without saying” and so essential that the contract likely would not function properlywithout it. The jurisprudence – from Alfred McAlpine through to modern cases – emphasizes judicial caution: courts do not rewrite contracts under the guise of implication, and will only import a tacit term where the case for it is truly compelling and supported by evidence.

For the practitioner, this means that any allegation of a tacit term must be handled with rigorous factual support. In litigation, one must precisely plead the tacit term and marshal all relevant circumstantial evidence to show it was within the parties’ contemplation at contract formation. In trial proceedings, credible witness testimony and documents will be crucial to persuade the court of the term’s necessity and obviousness. In motion proceedings, one should proceed only if the material facts are beyond genuine dispute; otherwise, a referral to oral evidence is likely. South African courts apply consistent legal standards in these inquiries: the common intention of the parties is paramount, assessed objectively through the lens of a reasonable person in the parties’ position. If that intention – as inferred from the contract’s text, context, and purpose – necessarily included the tacit term, the term will be given effect as though it had been expressly agreed. If not, the contract is enforced as written, and the court leaves the parties to the bargain they made, incomplete though it may be. The guiding principle is that a tacit term “must be founded in the agreement of the parties”, discerned by a court with great care and only when satisfied that “yes, of course” inescapably reflects what both parties had in mind.

• Alfred McAlpine & Son (Pty) Ltd v Transvaal Provincial Administration 1974 (3) SA 506 (A), esp. at 531E-532H (definition of tacit term).
• Wilkins NO v Voges 1994 (3) SA 130 (A) (inference of tacit term; actual vs imputed terms; necessity of inference).
• City of Tshwane Metropolitan Municipality v Brooklyn Edge (Pty) Ltd [2022] ZASCA 23 (officious bystander test and necessity for business efficacy).
• Food & Allied Workers Union v Ngcobo N.O. 2013 (35) ILJ 2821 (CC) (definition: tacit term is unspoken provision to which parties would say “yes, of course” if asked).
• R.H. Christie & G.B. Bradfield, Christie’s Law of Contract in South Africa (7th ed. 2016) at 175-181 (discussion of tacit terms and tests for implication).