The Supreme Court Re-Frames the Modern Law of Implied Terms

    View Author December 2015

    The leading judgement given by Lord Neuberger of the Supreme Court in the case Marks and Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey Ltd) [2015] UKCS 72 reinstates the traditional strict test when considering whether to imply words into a commercial contract. The case has set the precedent on the current law of implied terms of commercial contracts.

    The recent judgements of the Supreme Court seem to be moving away from the prior emphasis on commercial interpretation. Instead they are applying a strict literal approach to the commercial contracts and the laws that govern them (see also analysis of recent Supreme Court judgement Arnold v Britton and others [2015] UKCS 36) 

    These are particularly crucial developments for those in the international industries of shipping, offshore oil & gas and commodities, where many contracts are based on boiler plate wording with additional commercial terms added on to encompass the general financial agreement reached by the parties. Commercial parties attempting to enforce what they view as a clear, but not express, legal right are very much at risk. What they consider to be commercially obvious may not, by law, be sufficient to imply the term they seek to enforce. 

    This article appeared in the January 2016 Shipping and Trade Law Journal