In Australian law, the parties are generally free to decide for themselves what terms to include in their contract. But the law also has a role to play in putting terms into a contract. So, whenever you are deciding what the contents of a particular contract are, you must give thought both to what terms have been agreed, and to what terms might have been implied (put) into the contract by law.

In Australian law, some terms are so basic, and so important, that the courts have held that they should be put by law into every contract. These terms are sometimes called 'universal' terms.

The extent to which Australian courts recognise universal implied terms remains to be fully established.  The decided cases indicate that there are at least two recognised universal terms. One requires the contracting parties to cooperate in the performance of the agreement sufficiently to ensure that both parties get the expected benefit of the contract. The other requires the parties to act in accordance with the dictates of good faith. The examples in this section illustrate the effect of such terms.