Belize It or Not: Implied Contract Terms in Marks and Spencer v BNP Paribas

Publication Date01 Nov 2016
AuthorJoanna McCunn
Belize It or Not: Implied Contract Terms in Marks and
Spencer vBNP Paribas
Joanna McCunn
In Marks and Spencer vBNP Paribas, the Supreme Court restated the law on the implication
of terms in fact, rejecting the previously authoritative approach taken by Lord Hoffmann in
Attorney General of Belize vBelize Telecom Ltd. This ar ticle examines two major depar tures from
Belize in Lord Neuberger’s leading judgment: the treatment of implication as a process separate
from interpretation, and a return to the ‘traditional tests’ for the implication of terms. It argues
that these are retrogressive steps in our understanding of contract terms, which risk foster ing an
incoherent and unprincipled approach to the law.
The Privy Council’s advice on the implication of contract terms in Attorney
GeneralofBelizevBelize Telecom Ltd1(Belize) has, perhaps ironically, become an
object lesson in the diff‌iculties of interpreting a legal text. It has been observed
that Lord Hoffmann’s analysis in Belize ‘means different things to different
people.’2Over two years after Belize, Arden LJ noted that the courts were
‘probably still absorbing and ingesting’ it.3Unfortunately, before they fully
worked off their meal, the courts have been pressed with Marks and Spencer v
BNP Paribas (Marks and Spencer), a case that is likely to leavethem with digestive
diff‌iculties for some time to come.4
The express terms of a contract will often fail to provide for a certain set of
facts. The court will usually f‌ind that this omission was deliberate: if something
was meant to happen, the contract would have said so.5In some cases, however,
the court will ‘imply a term in fact’, f‌inding that the contract really does provide
for the issue, albeit implicitly.6Before Belize, it was well-established that the
court would only imply a term into a contract if it was necessary to give the
agreement business eff‌icacy, or if the term was so obvious that it went without
saying (the latter often illustrated with the ‘off‌icious bystander’ test). If neither
test was satisf‌ied, the loss would simply lie where it fell.
Clare College, University of Cambridge. I am grateful to Jonathan Morgan and to Jeffrey Thomson
for their comments on a previous draft.
1Attorney General of Belize vBelize Telecom Ltd [2009] 1 WLR 1988.
2 J. Carter and W. Courtney, ‘Belize Telecom: a reply to Professor McLauchlan’ [2015] LCMLQ
245, 261.
3Stena Line Ltd vMNRPF Trustees Ltd & Anr [2011] Pens LR 223, 232.
4Marks and Spencer plc vBNP Paribas Securities Services Trust Company (Jersey) Ltd [2015] UKSC
5 n 1 above, 1993.
6 Terms implied in fact are a distinct category from terms implied in law, which are default rules
for all contracts of a certain type.
C2016The Author. The Modern Law Review C2016 The Modern Law Review Limited. (2016) 79(6) MLR 1090–1115
Published by John Wiley& Sons Ltd, 9600 Garsington Road, Oxford OX4 2DQ, UK and 350 Main Street, Malden, MA 02148, USA

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