Liverpool CC v Irwin [1977] AC 239

• Plaintiffs claimed for damages from Defendant, who ran their block of flats, on the grounds that Defendant had failed to maintain the flats e.g. elevator problems etc.

• HL held that there was an implied duty on the part of Defendant to take reasonable care to ensure that the building was in repair, but on the facts there was no breach of this duty. 

Lord Wilberforce

• The courts are willing to imply terms. It is very commonly done in cases where the term to be implied would be considered by both parties to be part of the contract anyway. A term is also implied where, without it, the contract will not work - see Moorcock. This is a strict test.

• The standard for implying a term is that the term “must not exceed what is necessary in the circumstances”.

• In this case, what is necessary is that Defendant take reasonable care to keep he buildings in reasonable repair, which Defendant has done. 

NB In CA Lord Denning MR

• Suggested an approach that HL rejected and that Lord Wilberforce called “dangerous”.

• He says that the courts can imply a term where it is merely “reasonable” to do so (as opposed to necessary). This is much more trigger-happy with implying terms. 

Lord Salmon (HL)

• Said that to imply terms as freely as Denning advocates would be to undermine the point of the contract: that the parties have agreed what terms should be included. 

Lord Cross

• There is a distinction between terms implied in law and terms implied in fact: terms implied in fact are terms that exist but are not explicitly stated i.e. a common understanding that the term exists.

• However a term in law (which Lord Cross says exists here) is a term that should apply to all legal situations of this type (i.e. letter and lessee). 

RELATED CASES

• Re the Moorcock