UGS Finance Ltd v National Mortgage Bank of Greece: CA 1964

Pearson LJ said: ‘As to the question of ‘fundamental breach’, there is a rule of construction that normally an exemption or exclusion clause or similar provision in the contract should be construed as not applying to a situation created by a fundamental breach of contract . . it is a rule of construction based on the presumed intention of the contracting parties. It involves the implication of a term to give to the contract that business efficacy which the parties as reasonable men just have intended it to have. This rule of construction is not new in principle but it has become prominent in recent years in consequence of the tendency to have standard forms of contract containing exceptions clauses drawn in extravagantly wide terms, which would produce absurd results if applied literally.’
Pearson LJ
[1964] 1 Lloyd’s Rep 446
England and Wales
Cited by:
CitedNML Capital Ltd v Argentina SC 6-Jul-2011
The respondent had issued bonds but in 2001 had declared a moratorium on paying them. The appellant hedge fund later bought the bonds, heavily discounted. Judgment was obtained in New York, which the appellants now sought to enforce against assets . .

Lists of cited by and citing cases may be incomplete.
Updated: 13 October 2021; Ref: scu.441570