© 2025 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
Implied terms
- Implied term that footballer would be afforded reasonable opportunity of scoring 20 goals to meet condition
"[20] In Bournemouth and Boscombe AFC v Manchester United, unreported, 21 May 1980, Manchester United had bought a player from Bournemouth for about £200,000. Approximately £175,000 was paid. The balance of around £25,000 was to be paid when the player had scored 20 goals for Manchester United. But within a relatively short time the player was transferred to another club without having scored the 20 goals. The judge held that there was an implied term that Manchester United would afford him a reasonable opportunity of scoring those goals. Donaldson LJ said this:
". . . I have on occasion found it a useful test notionally to write into the contract under consideration a declaratory clause expressing the fact that the parties are not subject to the obligations which would flow from the clause which it is urged should be implied. I think it is useful in this case. We then get a contract reading: 'It is further agreed that Manchester United Football Club will pay a further sum of "27,770 to Bournemouth & Boscombe Football Club when Edward MacDougall has scored 20 goals in first team competitive football for Manchester United . . .provided always that Manchester United shall be under no obligation to afford MacDougall any reasonable opportunity of scoring 20 goals.' It at once becomes clear that the inclusion of the proviso renders this part of the contract 'inefficacious, futile and absurd', to use the words that Lord Salmon used in Liverpool City Council v Irwin [1977] AC 239, at p 262."
[21] Adopting that approach in this case, one might add into the termination clause, Clause 9, "provided also that NLL are at liberty to dispose of their business as a going concern to whomsoever they please whenever they please during the period of this contract." Such a declaration would have rendered the exclusive right to provide for their transport requirements similarly inefficacious, futile and absurd." (CEL Group Ltd v. Nedlloyd Lines UK Ltd [2003] EWCA Civ 1716)
- Implied term not to bring to an end party's requirements for type of services
"[22] In my view, therefore, the judge was right to imply a term that NLL would do nothing of their own motion to bring to an end their own requirements for road haulage services. By their own act they made it impossible for CEL to exercise the right which NLL had given them." (CEL Group Ltd v. Nedlloyd Lines UK Ltd [2003] EWCA Civ 1716)
- Implied term not to do something that would frustrate the contract
"The only doubt I have felt is in regard to the well known principle laid down by Cockburn C.J. in Stirling v. Maitland (1), where he said: "If a party enters into an arrangement which can only take effect by the continuance of a certain existing state of circumstances, there is an implied engagement on his part that he shall do nothing of his own motion to put an end to that state of circumstances, under which alone the arrangement can be operative."
This, as the Master of the Rolls observed, is not a rigid rule; it is capable of qualifications in any particular case; and it is a rule the application of which depends on the true construction of the agreement..." (Southern Foundries (§916) Limited v. Shirlaw [1940] AC 701)
"I take it, that if they enter into a contract to do a thing which they can only do as a company, they imply that they will do nothing of their own motion to put an end to the company. I agree with counsel that if the company had come to an end by some act not their own, the defendants would not be liable under this covenant, but if on the other hand the company come to an end by their own voluntary act they are still bound by it. This disposition was the act of the company itself, and they put a voluntary end to the offices under it. Without, therefore, considering how parties may stand affected by what has occurred in other respects, I am of opinion that the plaintiff is entitled to recover." (Stirling v. Maitland [1861 - 73] All ER Rep 358)
- Payment and delivery are presumed to be concurrent conditions
"[31] However, the Judge was also right to recognise that there is a presumption that delivery and payment will be concurrent conditions, reflecting the fact that such a transaction is essentially an exchange, with neither party being required to perform first and take the risk of non-performance by the other. In the case of the sale of goods that is made express by section 28 of the Sale of Goods Act 1979, which provides:
"Unless otherwise agreed, delivery of the goods and payment of the price are concurrent conditions, that is to say, the seller must be ready and willing to give possession of the goods to the buyer in exchange for the price and the buyer must be ready and willing to pay the price in exchange for possession of the goods."
[32] The equivalent presumption has long been recognised in relation to a sale of land. Thus in Heard v Wadham (1801) 1 East 619 Lord Kenyon CJ said at 629:
"I never expected to hear it said that these were independent covenants; where one man agrees to pay a certain sum of money on a given day, and another covenants to convey an estate to him on the same day; can it be contended for an instant, that though the one has not conveyed he may call upon the other to pay the money. Common sense revolts at such a proposition …"
The principle is now reflected in the Standard Conditions of Sale published by the Law Society.
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[36] It follows that the Judge was right to hold that clear words would be needed to rebut the presumption that the parties to a share sale contact, with a fixed completion date and place, intended that the obligations of delivery and payment would be dependent and concurrent." (Textor v. Iconic Sports Eagle Investment LLC [2026] EWCA Civ 355)
Contracts with public authorities
- Possible implied term to comply with public law duties
"[21] ... [The Judge] held that it was arguable that there was an alternative implied term, which Urban Wimax had not advanced in its pleadings, to the effect that the Council "was obliged to give a proper consideration to the results of the pilot scheme so as to be able to take them into account when making that decision" (para 60)...
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[29] Mr Stephen Smith QC for the Council contended that the implied term found by the judge could not be necessary because it did no more than replicate what was already the Council's obligation as a matter of public law, namely to take properly into account all relevant considerations. However, I do not accept that it was wrong of the judge to find that it is arguable that such a term is to be implied. To import into the contract as between the parties the Council's obligation in public law may well be necessary so as to incorporate this as a contractual obligation for the breach of which damages would be more readily recoverable and, indeed, the other party might be able to discharge the contract. Neither of those consequences is readily achievable by proceedings for judicial review, which in any event can be brought only with the court's permission. Mr Smith also contended that the term was too vague to be enforceable. However, if such an obligation equates to that which lies upon the Council in public law, then as it can be enforced in judicial review it is at least well arguable that it is similarly susceptible to enforcement as a matter of contract. I accordingly reject this challenge to the judge's conclusions." (Lord Mayor v. Urban Wimax Limited [2010] EWHC 1166 (Ch), Roth J)