I know someone who owns a short term rental property and who requires incoming guests to sign a contract. Their lawyer covered several areas including early cancellation on the part of the guest. However, nowhere in the contract does it talk about early cancellation on the part of the host. It doesn't say whether the host can cancel early, what will happen if they do, or that the host may not cancel early. If it isn't expressly permitted or not allowed in the contract, is it up to the owner how he/she wants to handle this type of event?



Common law jurisdictions read contracts objectively - that is if it unambiguously states what the parties agreed to then that is what the parties agreed to. If that includes selling your offspring into slavery or mortgaging your organs then so be it (such terms would be void for illegality but if they weren’t illegal then what it says is what happens).

Terms can be implied into contracts but only in limited circumstances:

  • implied by statute. A statute can imply a term if a contract doesn’t. A statute can also override an explicit term with the statute’s term.
  • implied by custom. Customary usage in an industry or market can be implied into a contract.
  • implied by past dealings. If the parties have repeatedly entered into contracts, terms may be implied by their past conduct.
  • implied at law. Specific categories of contracts can assume implied terms, for example, property leases imply that the tenant will have quiet enjoyment of the premises. Such terms can be overridden by explicit terms.
  • implied by fact. Such terms must be reasonable and equitable; necessary to give business efficiency to the contract. For example, the contract will not work effectively without the term; so obvious that it ‘goes without saying’. An impartial bystander in the position of the parties should be able to assume that the term is part of the contract; capable of clear expression; and not contradict any other terms of the contract.

If there is no clause permitting the host to cancel the contract, there is no basis for implying one: the host cannot cancel the contract. If they do they are repudiating the contract and the other pa try can sue for damages.

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