Implication

Question 1

what is implication

Answer 1

Some terms are included even though they are not written in the contract itself. Terms implied in fact: part of the parties agreement is implied but isn’t written in the contract

Question 2

What is part 1 of the current test for Implication in Bathurst

Answer 2

1. Start with interpretation of express terms. Do they direct the current circumstances?

If the contract says nothing, presumption that the contract did not intend to regulate the circumstances that are before it

Question 3

What is part 2 of the current test for implication in Bathurst

Answer 3

2. Do the BP refinery factors point to an implied term that is strictly necessary to spell out what the contract should mean (taking into account relevant background and purpose of contract, and don’t have to meet every limb strictly, use as guiding factors)

a) Is it reasonable and equitable to imply the term

b) Is it necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it
○ Business efficacy: if the express terms don’t achieve the purpose we may need to imply them - Moorcock

c) Is it so obvious ‘it goes without saying’
○ Officious bystander test: The officious bystander suggests a term and both the parties say of course that is included - Shirlaw

d) Is it capable of clear expression
Does it contradict any express term of the contract

Question 4

Moorcock

Answer 4

As a matter of business efficacy it was necessary to imply a term about the ship damaged at the dock

Question 5

Shirlaw

Answer 5

Implied term here that there is no new power to remove him as director as it would undermine the parties’ intentions

Question 6

Belize

Answer 6

Court added a term that they could remove directors because that would be an absurd result

Question 7

Barton v Morris

Answer 7

No term could be implied: contract already had the 6.5m term. Did not need a new term for business efficacy. Only imply terms when absolutely necessary

Question 7

BP Refinery

Answer 7

Implied term that BP refinery should get the new rates because it was in the contract, and it would silly for them to not get rates because the company has a new name

Question 8

Realestate.com

Answer 8

Photographer argues there was an implied term that the license for photos would expire on the sale of each property. A reasonable person would understand that these photos needed to be used in the way they were and no implied term existed.

Question 9

Terms Implied in Law (usually by statute or common law)

Answer 9

Don’t need to know specifics just that they exist