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Foley v Classique Coaches Ltd

[1934] 2 KB 1

Case summary last updated at 03/01/2020 15:26 by the Oxbridge Notes in-house law team.

Judgement for the case Foley v Classique Coaches Ltd

F sold C part of his land in a contract on the provision that C would buy petrol from F “at a price to be agreed by the parties in writing from time to time”, while an arbitration clause was inserted. F bought the land and for 3 years bought petrol from C. F then denied the contractual requirement to buy petrol from C, since the clause was too vague. The court enforced the agreement as one to buy petrol at “a reasonable price”. 
 
Greer LJ: “One cannot add to a contract an implied term inconsistent with or which contradicts the express terms of the contract, but in a suitable case one can imply a term”- his argument seems to be that one can imply a term to make a contract workable where one does so within the spirit or terms of the agreement, as here. The arbitration clause was to determine what the reasonable price was. 
 
Maugham LJ: The agreement that F would buy petrol from C was key to inducing C to sell the land and both parties intended to be bound by it (else why would C have complied with it for the past 3 years?). There is more evidence he cites to support the seriousness of the clause that F would buy from C. Assuming the parties were aware that there might be future disputes over the price (safe assumption, unless they are totally stupid) and assuming the agreement that C would buy from F (safe assumption) then a “reasonable price” seems to be the only answer 
 
Good: in this case the outcome that the parties hoped to achieve (a mutually agreed or “reasonable” price) is given effect, 

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