Barton v Morris

Where a contract allocates the risk of an event, the court will neither imply a term nor allow an unjust enrichment claim to override it.

Citation
[2023] UKSC 3, [2023] AC 684
Court
UK Supreme Court
Year
2023
Subject
Contract Law
Topic
Terms of the contract

Facts

In 2006 Mr Barton made an oral agreement with Foxpace Ltd, a company controlled by Mr Gwyn-Jones, that Foxpace would pay him £1.2 million if he introduced a buyer who bought Foxpace's property in Hampton Wick for £6.5 million. Mr Barton introduced a buyer who agreed to pay £6.5 million, but after problems emerged with planning permission the price was reduced, and the property was sold for £6 million. Foxpace refused to pay Mr Barton anything, and he claimed either a reasonable sum for his services under an implied term or, alternatively, payment in unjust enrichment. The Court of Appeal allowed his unjust enrichment claim and awarded him £435,000.

Legal principle

The Supreme Court held, by a majority of three to two, that Mr Barton was entitled to nothing. No term could be implied requiring payment if the property sold for less than £6.5 million, because the express agreement had made payment conditional on a sale at that price and the implied term would contradict it. The claim in unjust enrichment also failed. Where the parties have made a contract that, on its proper interpretation, allocates the risk of an event, here the risk that the property might sell for less, the law of unjust enrichment cannot be used to reverse that allocation. Lady Rose and Lord Burrows dissented, on the basis that the contract did not deal with the situation and that an unjust enrichment claim should succeed.

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This summary is for study and revision and is not legal advice. Although our case summaries are checked for accuracy, we do not guarantee that they are free from errors or omissions. Always read the full judgment for the court's reasoning.

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