The Practical Lawyer

Home
About
CPD
Subscribe
Contact

Contract – implied terms

The SC has confirmed that it will imply a term into a contract to give it business efficacy.

The facts of the case were quite simple. A developer mentioned to his neighbour that he was having difficulty in selling the remaining flats in a development. The neighbour contacted an estate agent who in turn contacted the developer, told him he was an estate agent and that his commission would be 2%. A meeting at the flats was arranged and a buyer was introduced by the estate agent. The agent informed the developer of the agreement to buy and attached his terms of business to an email. The sale completed and the estate agent tried to claim his commission. The developer refused to pay.

The SC held that the parties had intended to create a legally binding contract by their words and actions. In the course of events on the sale of a property it is understood that the agent’s commission will become due on completion and would be payable from the proceeds of sale. The SC therefore did not feel it necessary to imply a term into this particular agreement because the terms were already clear – the estate agent found a buyer for the developer’s property and had told him beforehand what it would cost for him to do so. However, the key point is that the SC said that it would have ‘no hesitation’ in implying a term to give business efficacy to the agreement had it proved necessary to do so.

The case confirms that courts will imply terms that are obvious to give business efficacy to an agreement and that context is important. See Wells v Devani [2019] UKSC 4.

 

Most-read articles

Contract – implied terms
Thursday, 14 March 2019
The SC has confirmed that it will imply a term into a contract to give it business efficacy. Read more...
Confidentiality – existence and content of will
Thursday, 14 March 2019
Each month we consider conduct and practice issues relevant to busy practitioners. This month we will consider the importance of keeping confidentiality in mind when disclosing the existence or... Read more...
Code for Completion by Post – new code
Thursday, 14 March 2019
The Law Society has published the new Code for Completion by Post. It will come into effect on 1 May 2019. CQS-accredited firms must use the Code. Read more...
Proceeds of crime – benefit
Thursday, 14 March 2019
The appellant’s criminal conduct was such that he had obtained the money and therefore benefited from it.  Read more...
Disability payments – no right to dismiss
Thursday, 14 March 2019
There is an implied term in a contract of employment that an employee will not be dismissed for incapacity while on long-term disability benefit. Read more...
Civil partnership – guidance
Thursday, 14 March 2019
How does a civil partnership affect the parties’ rights to different pensions?  Read more...
HMLR – fraud is not ‘mistake’
Thursday, 14 March 2019
A court can order rectification of an HMLR register of title if a mistake has been made.  Read more...
LTA54 – redevelopment must be real intention
Thursday, 14 March 2019
LTA 54 confers security of tenure on business Ts. L and Ts can contract out of the security of tenure provisions by following a prescribed procedure before the business tenancy is entered into.  Read more...
AST – security deposits capped
Thursday, 14 March 2019
From 1 June 2019 security deposits taken on commencement of ASTs will be capped at no more than five weeks’ rent where the annual rent is under £50,000 (and six weeks’ rent where the annual... Read more...
Loss resulting from breach of duty – reaffirmed
Thursday, 14 March 2019
The SC has recently given a judgment on solicitor’s professional negligence. The case involved a retired miner.  Read more...

Resources

IAG International
MSI Global Alliance
www.totallylegal.com
Join the IBA now!
In House Lawyer