0370 270 6000

When can the court imply a term in to a contract?

21 November 2016

The Court of Appeal concluded that it was wrong in principle for a court to attempt to turn an incomplete oral contract into a binding contract by inserting additional terms which were not agreed by the parties at the outset.

The case of EDWARD MARTIN ROBERT WELLS (D) v MEHUL DEVANI (A) [2016] EWCA Civ 1106 involved a dispute between a developer and an estate agent. A had verbally told D that he could find a buyer for D’s flats and said stated what his commission was, but did not say what event would trigger this entitlement.

After A found a buyer for D, he relied on what he had said to D and unsuccessfully tried to claim his commission. The Trial Judge held that an oral contract had existed and implied a term into the contract, which allowed A to receive a commission payment.

At the original trial there was a clear factual finding that nothing had been said about the trigger event for payment of commission. The Court of Appeal found that the parties’ oral contract was incomplete and the Court could not imply a term relating to the payment of commission into the contract. The appeal was allowed.

This case illustrates that the court cannot remedy a contract where an essential term relating to performance is not agreed between the parties. Parties need to ensure that their contracts, whether they are oral or written contracts, contain all the necessary terms to allow for the proper performance of the contract.

Related opinions

SFO fail to secure individual criminal convictions following Deferred Prosecution Agreement

On 16 July 2019 the Serious Fraud Office released details of the Deferred Prosecution Agreement reached with Sarclad Ltd in July 2016.

View blog

When a claimant must accept the risk of his own actions

The Court of Appeal decision in Clay v TUI UK Ltd [link] considers where an intervening act is sufficient to break the chain of causation.

View blog

Killer self-drive vehicle negligence - a new claims era?

As news has emerged of the first reported case in the US involving a self-driving car killing a pedestrian, it is interesting to consider the future claims climate in its wake.

View blog

New Insurance Distribution Directive application deadline announced

EU ambassadors confirmed yesterday that new dates for the transposition and application deadlines for the Insurance Distribution Directive had been agreed following the European Commission’s proposal to delay them in 2017.

View blog

Mailing list sign up

Select which mailings you would like to receive from us.

Sign up