Contract Law - Seminar 14 Content of the contract: Expressed and Implied Terms McCaughran J, 'Implied Terms: The Journey of the Man on the Clapham Omnibus' [2011] 70(3) CLJ 607-622 · Only when both parties would have given the same answer, approving the implication of the term, that it's to be implied · Truth - judge finds themselves in the criteria of what is reasonable . Sometimes contracts may be interpreted to mean something different to what they do - courts then try to give a meaning which is in accordance with commercial common sense · Implication is essential to give effect to the reasonable expectations of the parties . Philips Electronique - treated implication of a term as a different exercise from the construction of express terms . Approach in Belize in context of contractual implied terms, replacement of the officious bystander by another character from legal folklore - Clapham omnibus . Hall - test of the man on the Clapham omnibus - has background knowledge that parties had when contracting · Belize - task of judge is to consider background to contract, express terms, parties reasonable expectations and decide whether necessary to imply term . Usually interference is no term should be implied · Law prior to Belize was clear . The Reborn summarised principles to be derived from Belize o Court cant improve the contract to make it fairer or more reasonable o Court is concerned to discern the meaning the contract would convey to a reasonable addressee having the background knowledge of the parties o Question of implication only arises where the contract doesn't provide for what is to happen when some event occurs o Default position is that no term is to be implied o If reasonable addressee would understand the contract to mean something more then the court will imply a term o In doing so, court isn't adding to the contract, but spelling out what it means . For terms to be implied, must be if suggested to the parties prior to the contract, they both would have approved it Lord Grabiner, 'The Iterative Process of Contractual Interpretation' [2012] 128 (Jan) LQR 41-62 . Purposive interpretation of a contract is a useful tool where the purpose can be identified with reasonable certainty . Where parties have taken the time to write down terms of their contract, right way is to ensure analysis starts from the right place and follows a logical process · Lord Neubergers iterative process . Important the 'commerical purpose' of a transaction is derived from the contract as a whole . Mistakes only corrected if the linguistic mistake and reasonably intended correction are clear
. A mistake can be corrected even if the provision is otherwise clear and ambiguity is only relevant to the weight that a court should give to the factual matrix and broader notions of commercial common sense . If contract works, limited scope for correcting it on the basis that is produces an unreasonable result ·