The Moorcock
A term will be implied in fact where it is necessary to give the contract business efficacy.
Facts
The owners of a wharf and jetty on the River Thames agreed to allow the owners of the steamship Moorcock to moor and unload the ship at the jetty, charging for the use of their cranes to unload it. Both parties knew that, at low tide, the ship would rest on the riverbed beside the jetty. The riverbed was not owned or controlled by the wharf owners, but belonged to the Thames Conservancy. At low tide, the ship settled on a ridge of hard ground and was damaged. The wharf owners had taken no steps to check whether the riverbed was safe and had given no express promise about it.
Legal principle
The Court of Appeal held that the wharf owners were liable. Bowen LJ said that the law implies a term in order to give the transaction such business efficacy as the parties must have intended, and that the implication arises from the presumed intention of the parties with the object of giving the transaction that efficacy. The court implied a term that the wharf owners had taken reasonable care to ascertain that the riverbed by the jetty was not in a condition that would endanger the ship. The case is the origin of the business efficacy test for implied terms.
Related cases on terms of the contract
- Arnold v Britton [2015] UKSC 36, [2015] AC 1619
- Barton v Morris [2023] UKSC 3, [2023] AC 684
- 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
Studying contract law? Our tutors help you understand and apply cases like this in essays, problem questions and exams. Request a quote or browse our law notes.
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.
