(b) That's right. Terms are implied into contracts ad hoc only in very limited situations. The courts have laid down various requirements that must be met before such terms become part of a contract. One of these is that there must be gaps in the agreed terms, which gaps make the contract unworkable in a business sense. Without this, the implied term will not be considered sufficiently necessary. In addition, it must be objectively so obvious that the parties intended to include the suggested term that they did not bother to include it expressly into their contract.

To determine this, the courts apply the 'officious bystander' test. It is important to realise that the test is both hypothetical and objective: can it be inferred from the known circumstances that the parties would have assented to the suggested term if they had been asked about it when contracting? It should be noted that there are additional requirements too: the suggested term must be reasonable and fair; it must be clear and unambiguous; and it must not contradict the express terms.

See BP Refinery (Westernport) v Shire of Hastings.

In the result, (b) is the best answer. Answer (a) misstates the test, and suggests a subjective approach. Answer (c) wrongly uses the test that is applied to decide whether or not a breach of an innominate term justifies terminating performance of a contract.