Contracts and Implied Terms

The High Court this week considered when the important issue of implied terms, that is terms which the parties have not expressly agreed but may be considered to be implied under certain circumstances, including:

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  • Where custom or usage allows for sum a term (Exxonmobil Sales and Supply Group v Texaco [2003] EWHC 1964 (Comm).
  • Where it is obvious or it will give business efficacy to the contract (Trollope & Colls v North-West Metropolitan Regional Hospital Board [1973] 1 WLR 601 and Liverpool City Council v Irwin [1977] AC 239).

  • In Jackson v Dear and another [2012] EWHC 2060 (Ch) (25 July 2012) Briggs, J. gave judgement in favour of the Claimant, the Court found that the proper test for an implied term was the ‘necessity’, ie ask the question does the implied o make the contract work- is it necessary to apply the test? In this instance it was deemed to be so and the Claimant was successful in his claim.

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