A contractual term is "[a]ny provision forming part of a contract" Each term gives rise to a contractual obligation, breach of which will can give rise to litigation. Not all terms are stated expressly and some terms carry less legal gravity as they are peripheral to the objectives of the contract.

Classification of term
Status as a term is important as a party can only take legal action for the non fulfillment of a term as opposed to representations or mere puffs. Legally speaking only statements that amount to a term create contractual obligations. Statements can be split into the following types:
There are various factor that a court may take into account in determining the nature of a statement. These include:
The parol evidence rule limits what things can be taken into account when trying to interpret a contract. This rule has practically ceased operation under UK law

Puff (sales talk): If no reasonable person hearing this statement would take it seriously, it is a puff, and no action in contract is available if the statement proves to be wrong. It may also be referred to as "puffery". This is common in television commercials.
Representation: A representation is a statement of fact which does not amount to a term of the contract but it is one that the maker of the statement does not guarantee its truth. This gives rise to no contractual obligation but may amount to a tort, for example misrepresentation.
Term: A term is similar to a representation, but the truth of the statement is guaranteed by the person who made the statement therefore giving rise to a contractual obligation. For the purposes of Breach of Contract a term may further be categories as a condition, warranty or innominate term.
Timing: If the contract was concluded soon after the statement was made, this is a strong indication that the statement induced the person to enter into the contract. Lapse of a week within the negotiations of a car sale was held to amount only to a representation in Routledge v McKay provided that a very important spoken term may persist even if omitted from the written consolidation; this case concerned the quality of a residential house. Status as a term
A Term may either be expressed or implied. An Express term is stated by the parties during negotiation or written in a contractual document. Implied terms are not stated but nevertheless form a provision of the contract.

Implied terms
The Privy Council established a five stage test in BP Refinery Western Port v. Shire of Hastings, in the context of a Trade Union membership contract.
Clear expression: The term must be capable of clear expression. No specific technical knowledge should be required.
Consistency: The implied term may not contradict an express term.
Necessity: The term must be necessary to ensure reasonable or effective operation of a contract of the nature before the court.
Consistency: The implied term may not contradict an express term (same as for formal contracts).
Clear expression: The term must be capable of clear expression (same as for formal contracts).
Obvious: McHugh and Gummow JJ have stated that it must also be obvious. Terms implied in fact
These are terms that have been implied into standardised relationships.
Common law.
These terms will be implied into all contracts of the same nature as a matter of law.
Statutory.
The rules by which many contracts are governed are provided in specialized statutes that deal with particular subjects. Most countries, for example, have statutes which deal directly with sale of goods, lease transactions, and trade practices. For example, most American states have adopted Article 2 of the Uniform Commercial Code, which regulates contracts for the sale of goods. The most important legislation implying terms under United Kingdom law are the Sale of Goods Act 1979, the Consumer Protection (Distance Selling) Regulations 2000 and the Supply of Goods and Services Act 1982 which imply terms into all contracts whereby goods are sold or services provided.

Liverpool City Council v. Irwin established that when a tour operator contracts to for the sale of goods. The most important legislation under United Kingdom law is the Sale of Goods Act 1979, the Consumer Protection (Distance Selling) Regulations 2000 and the Supply of Goods and Services Act 1982 which imply terms into all contracts whereby goods are sold or services provided. Terms implied in law
One is generally bound by the custom of the industry that one is in. To imply a term due to custom or trade, one must prove the existence of the custom, which must be notorious, certain, legal and reasonable

Good faith
If a contract specifies "subject to contract", it may fall into one of three categories:
This may also refer to contingent conditions, which come under two categories: condition precedent and condition subsequent. Conditions precedent are conditions that have to be complied with before performance of a contract With conditions subsequent, parties have to perform until the condition is not met. Failure of a condition repudiates the contract this is not to necessarily discharge it. Repudiation will alway gives rise to an action for damages.

The parties are immediately bound to the bargain, but they intend to restate the deal in a formalised contract that will not have a different effect; or
The parties have completely agreed to the terms, but have made the execution of some terms in the contract conditional on the creation of a formalised contract; or
It is merely an agreement to agree, and the deal will not be concluded until the formalised contract has been drawn up.
The purchaser must seek finance; and
When offers of finance arrive, the purchaser must make a decision as to whether the offers of finance are suitable.