The particular focus of this essay is on how terms are implied. This is central because the courts intervene and impose implied terms when they believe that in addition to the terms the parties have expressly agreed on, other terms must be implied into the contract. Gillies argued that the courts have become more interventionist in protecting the rights of contracting parties thereby encroaching upon the notion of freedom of contract. The doctrine of freedom of contract is a prevailing philosophy which upholds the idea that parties to a contract should be at liberty to agree on their own terms without the interference of the courts or legislature. Implied terms can be viewed as a technique of construction or interpretation of contracts. It has been argued that the courts are interfering too much in their approach to determine and interpret the terms of a contract. The aim of this essay is to explore this argument further and in doing so consider whether freedom of contract is lost due to courts imposing implied terms. The essay will outline how the common law implies terms. The final part of the essay will examine whether Parliament, by means of a statute, or terms implied by custom restrict freedom in a contract. An overall conclusion on the issue will be reached.
One of the principal grounds for rejecting insurance claims is that the claim is not covered by the terms of the policy, or is specifically excluded. The rule that coverage provisions should be interpreted broadly and exclusion clauses should be interpreted narrowly is really just a corollary of the Contra Proferentem rule which applies in the event of ambiguity i.e. it is the insurer who likely drafted the insurance contract and construing coverage provisions broadly, or exclusion clauses narrowly, will be to the detriment of the insurer as the party who drafted the contract. The construction of exclusion clauses and coverage provisions helps justify the objective intention of the contract. This is the intention which the court considers, a reasonable person in the position of the contracting parties, would have had. It is submitted that coverage provisions should be broad and encompassing and exclusion clauses should be narrow. However, before such a conclusion is reached, this paper will aim to justify the reasoning behind such a claim analysing arguments for and against such a proposition, drawing upon the landmark case Darlington Futures Ltd v Delco Australia Pty Ltd to help relate the discussion to issues raised by such considerations.
According to the UCC (Uniform Commercial Code) “good faith” is the belief that those involved in a contract will act honestly and fairly. That is saying that those entering a contract will act in and honest and fair manner in regards to the contracts they are entering. The obligations of good faith are part of every contract under the UCC. They act as the framework for the parties entering a contract. An example of good faith is car insurance. A person pays monthly for car insurance with the understanding that their insurance company will cover a certain amount in damages if the car is involved in an accident. If after the car is involved in an accident they insurance company does not pay the amount agreed to for the damages they have not acted
In Caparo Industries plc v Dickman7, it was determined that courts had to test the duty by “whether the damage was reasonably foreseeable, whether there was a relationship of proximity between claimant and defendant, and whether it is just and reasonable to impose a duty.”8 If so, then a duty of care could arise.
“An insurance company has a duty to act in good faith in settling claims and a breach of that duty will give rise to a cause of action by the insured. That duty, however, runs only from the insurer to the insured, not to third parties.” Id. at page 5.
As a starting note, any mention of concurrent liability should be assumed to mean concurrently liability in tort and contract. Traditionally the distinction between contract and tort was that contract concerns the improvement of the claimant 's position, whereas tort is concerned with dealing with their position worsening. There has been dispute around concurrent liability and its ambiguity has led to varying decision in cases and statute making as Taylor puts it “the basis of concurrent liability uncertain”. This essay will argue Tort has and is extending itself beyond its traditional role due to judges presumption of morality leading to the unclear concurrent liability we see today. Whilst this concurrent liability shows some
There is no general definition of good faith under English contract law; it is generally a presumption that two parties will act honestly and fairly with one another. Unlike other systems of law, such as the French Civil Code, English contract law does not recognise the obligation of ‘good faith’. Instead there is more of a negative obligation not to tell lies rather than a positive obligation to tell the truth and act in good faith. However recent cases such as Yam Seng PTE Ltd v International Trade Corporation Limited have shown that the courts attitudes towards good faith have been developing and changing. Now it may be possible to imply a term of good faith in a contract. Therefore, where traditionally there has been a negative obligation not to tell lies, English contract law may be slowly moving towards an obligation of good faith.
Good faith has thus been defined as “an honest and sincere intent and purpose to explore all possibilities of settlement of the matters in dispute, until the exhaustion of all reasonable efforts and the arrival at a point where a definite decision is reached.”
In this article, Justine Kirby (2000) analyzes the basic law, section 11 of the Contractual Remedies Act 1979, and acknowledged routines for "exchanging" commitments, and after
The Jones Act prevents foreign-flagged ships from carrying cargo between the US mainland and noncontiguous parts of the US, such as Puerto Rico, Hawaii, Alaska, and Guam.
Importing legislation from a nation of dissimilar jurisprudential background is likey to create inconsistency in our current legal framework. Not only is the notion of good faith irreconcilable with existing common law, the concept itself is vastly uncertain and open to interpretation. It has been criticized that the misapplication of good faith in contract in US has created a state of confusion leading to irreconcilable decisions. The definition of good faith in US has largely been uncertain; it even has been referred as ‘mystery’ . The illusory nature of good faith will have a negative impact on our established legal system:
The law of contract in many legal systems requires that parties should act in good faith. English law refuses to impose such a general doctrine of good faith in the field of contract law. However, despite not recognizing the principle, English contract law is still influenced by notions of good faith. As Lord Bingham affirmed, the law has developed numerous piecemeal solutions in response to problems of unfairness. This essay will seek to examine the current and future state of good faith in English contract law.
A Contract requires several elements in order to be considered enforceable. However for the purpose of this essay we would explore one of these elements in order to effectively understand the controversial cases of Williams v Roffey Brothers and Nicholls (contractors) Ltd (1990) and Stilk v Myrick (1804). Before going any further one should briefly understand the doctrine of Consideration. Despite the vast amount of content written, the doctrine of consideration is still to this day unclear due to the inconsistency of the courts and its application of necessary rules. Consideration refers to that which the law deems as valuable in that the promisor receives from the promise that which was promised. In other words, it is the exchange of something of value between the parties in a contract. One should be mindful that in English law, every promise may not be legally enforceable; it requires the court to distinguish between are enforceable and non-enforceable obligations. This brings us to the controversial cases of Stilk v Myrick and Williams v the Roffery brothers. Many argue that that the case of Williams was wrongly decided leading to impairments in the rule initially established in Stilk v Myrick. This essay seek to analyse and critique the cases of Stilk v Myrick and Williams v Roffey Brothers and also highlight whether or not the new rule of Practical benefit lead to serious impairments in later cases.
It was this mergence that saw Lord Mansfield becoming known as ‘the founder of commercial law within this country [United Kingdom]’, due to his ability to harmonise ‘commercial custom and the common law ...with an almost complete understanding of the commercial community, and the fundamental principles of the old law and that that marriage of idea proved acceptable to both merchants and lawyers.’ At this stage, the principle of caveat emptor was utilised as a guiding principle for the courts, devised namely in response to the manner in which business at this time was undertaken. This was in response to the manner in which business was conducted, namely in small fairs with small quantities of goods being bought and sold, buyers were afforded the opportunity to inspect the goods and use their own knowledge and skill to determine whether or not to purchase them. As such, it was the buyer’s responsibility to ensure that due diligence was observed at the time of purchase. Failing to inspect the goods resulted in the cost would be lost if the goods purchased were not what was wanted. In this context protection for buyers was to a certain extent non-existent. The only way in which a seller could be held liable was in circumstances where a written warranty was issued or if the case was considered to be one of false affirmation.
Good faith means employers and employees need to build relationships based on mutual trust and confidence in all aspects of the employment environment. Both the employers and employees are expected not to do