UK Court Of Appeal Confirms Test For Implied Terms in Contracts

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Source: Mason Hayes & Curran via Mondaq, 24 March 2017

“A recent case highlights the courts’ continued reluctance to imply terms into effective and coherent contracts and reaffirms the position established in Marks & Spencer PLC v BNP Paribas that an implied term must not contradict an express term as a ‘cardinal rule’.

The UK Court of Appeal has reaffirmed the criteria to be applied in determining whether a term should be implied into a contract:

  • In determining whether a term should be implied, it is necessary to first interpret the express terms;
  • An implied term must not contradict any express term of the contract as “a cardinal rule”; and
  • Where the contract is lengthy and carefully drafted, the courts will be very reluctant to imply a further term even if it does not actually conflict with the express terms.

The case highlights the courts’ continued reluctance to imply terms into effective and coherent contracts and reaffirms the position established in Marks & Spencer PLC v BNP Paribas in which a majority of the Supreme Court restated the principles governing the implication of contractual terms.

The judgement makes clear that this is the case even where the implied term does not conflict with the express terms of the contract.”

Source article here

 

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