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.
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.
Related cases on terms of the contract
- Arnold v Britton [2015] UKSC 36, [2015] AC 1619
- Bettini v Gye (1876) 1 QBD 183
- Braganza v BP Shipping Ltd [2015] UKSC 17, [2015] 1 WLR 1661
- Bunge Corp v Tradax Export SA [1981] 1 WLR 711
- Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38, [2009] 1 AC 1101
- Dick Bentley Productions Ltd v Harold Smith (Motors) Ltd [1965] 1 WLR 623
- Hongkong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 QB 26
- Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896
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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.
