The court was requested to imply a term into a building contract.
Held: The term could not be implied, since at least four alternatives might also be implied.
Lord Pearson said: ‘[T]he court does not make a contract for the parties. The court will not even improve the contract which the parties have made for themselves, however desirable the improvement might be. The court’s function is to interpret and apply the contract which the parties have made for themselves. If the express terms are perfectly clear and free from ambiguity, there is no choice to be made between different possible meanings: the clear terms must be applied even if the court thinks some other terms would have been more suitable. An unexpressed term can be implied if and only if the court finds that the parties must have intended that term to form part of their contract; it is not enough for the court to find that such a term would have been adopted by the parties as reasonable even if it had been suggested to them; it must have been a term that went without saying, a term necessary to give business efficacy to the contract, a term which, though tacit, formed part of the contract which the parties made for themselves.’
Lord Cross of Chelsea stated: ‘[W]hat the respondents are asking the court to do is, in effect, to rectify the clause by the addition of some words which will make it accord not indeed with the actual intention of the parties but with the intention which the respondents say must be imputed to them. In such a case, as I have always understood the law, it is not enough for the party seeking to have the words varied to say to the court, ‘We obviously did not mean what we have said, so please amend the clause so as to make it read in what you think is the most reasonable way.’ He must establish not only that the parties obviously did not mean what they said but also that if they had directed their minds to the question they would obviously have framed the clause in the way for which he contends.’
Judges:
Lord Pearson, Lord Guest, Lord Diplock
Citations:
[1973] 1 WLR 601, [1973] 2 All ER 260
Jurisdiction:
England and Wales
Cited by:
Cited – Donington Park Leisure Ltd v Wheatcroft and Son Ltd ChD 7-Apr-2006
Leave to apply was pursued under the provisions of a Tomlin order. The parties had disputed the extent to which parts of the order should be exhibited to the court.
Held: The Tomlin order should be amended to add terms necessary to give effect . .
Cited – Attorney General of Belize and others v Belize Telecom Ltd and Another PC 18-Mar-2009
(Belize) A company had been formed to manage telecommunications in Belize. The parties disputed the interpretation of its articles. Shares had been sold, but the company was structured so as to leave a degree of control with the government. It was . .
Cited – Mediterranean Salvage and Towage Ltd v Seamar Trading and Commerce Inc (‘The Reborn’) CA 10-Jun-2009
The court confirmed that the necessity to give business efficacy to a contract was still required for the implication of a term into a contract. . .
Cited – Paymaster (Jamaica) Ltd and Another v Grace Kennedy Remittance Services Ltd PC 11-Dec-2017
(Court of Appeal of Jamaica) The parties disputed the ownership of copyight in certain computer software, and also an allegation of the misuse of confidential information. . .
Cited – Marks and Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd and Another SC 2-Dec-2015
The Court considered whether, on exercising a break clause in a lease, the tenant was entitled to recover rent paid in advance.
Held: The appeal failed. The Court of Appeal had imposed what was established law. The test for whether a clause . .
Lists of cited by and citing cases may be incomplete.
Contract
Updated: 14 May 2022; Ref: scu.241559