CHAR_A01.PDF, page 1-18 @ Normalize ( CHAR_A01.QXD )

The following case is the general authority for the principle that a term may
be implied if it is clear that the parties must have intended to include it.

The decision in this case, and the principle outlined, was clearly intended to
prevent injustice and give effect to an otherwise workable contract (see also
the section in Chapter12 [Mistake] on Rectification). It has been cited many
times since as an authority, but it should be used with caution. Clear
guidelines are needed on the circumstances when a term may be implied to
avoid uncertainty. It is certainly not true that any term which is afterwards
thought to be a reasonable one will be implied. A term will only be implied
where it is essential to make the contract function, reflecting what the parties
must have originally intended. McKinnon J explained this, in words that have
come to be known as the officious bystander test, in the following case.

104 Contract law

The Moorcock (1889)

The defendants owned a wharf and jetty, and contracted with the

plaintiffs to moor and unload the plaintiffs’ boat, The Moorcock, at the

jetty. The water was too shallow at the jetty, so the boat ran aground and

was damaged. It was held that in a business contract like this one,

where a party invites another to moor at his jetty, there must be a term

implied that it is suitable for that purpose, so the defendants were held

liable for the damage.

Shirlaw v Southern Foundries (1939)

Prima facie, that which in any contract is left to be implied and need not

be expressed is something so obvious that it goes without saying. Thus

if, while the parties were making their bargain, an officious bystander

were to suggest some express provision for it in their agreement, they

would testily suppress him with a common, ‘Yes, of course!’

A B

Don’t you want

to include this?

An officious

bystander

contract

Ye s , o f

course

Figure 6.2