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Implied Terms When can Terms be implied?
Implication by custom
Terms can be implied from custom of market, trade of locality where contract made o Ungoed Thomas J in Cunliffe-Owen v Teather & Greenwood :
? Must be certain
analogous/consistent cases where applied
so well known, capable of being found with effort
? Recognised as binding
compliance seen as legal obligation not matter of choice/commercial convenience
? Not contradicted by express term or nature of contract Implication by fact
The business efficacy test o The Moorcock : C owned a steamship and contracted D. Parties agreed that steamship would be discharged and loaded at D's wharf at low tide so that it would run aground. When in wharf, the ship was damaged by a ridge of hard ground. C tried to recover damages for breach of contract.
? Bowen LJ:
The implication which the law draws on is the intention of the parties, o with the object of giving efficacy to the transaction
? and preventing such a failure of consideration as cannot have been in the contemplation of either side
In business transactions, what the law desires to effect by the implication o is to give such business efficacy to the transaction
? as must have been intended at all events of both parties who are business men o Phang: Clear that there is perhaps an underlying hint of a doctrine of fairness used by the courts
? Fry LJ (other judge in CoA) ex-judicially: Law is like living organisms which biologists say are governed by the two laws of hereditary and the tendency to variation,
useful variations tending to permanency and useless ones tending to disappear o Moi: although still an emphasis on express evidence showing intention superseding what court thinks
? Interesting use of "must" - not what they "did"- intend
The officious bystander test o Shirlaw v Southern Foundries Ltd:
? MacKinnon LJ
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