Contractual Co‐Operation and the Implied Term
| DOI | http://doi.org/10.1111/j.1468-2230.1968.tb01199.x |
| Date | 01 July 1968 |
| Author | J. F. Burrows |
| Published date | 01 July 1968 |
CONTRACTUAL CO-OPERATION AND
THE
IMPLIED TERM
Om
finds occasional reference in the contract textbooks and cases
to a duty of
‘(
co-operation
”
which rests on each party to
a
contract: a duty, as
J.
F.
Wilson has put it, to
((
facilitate
performance of the contract.” An examination of this concept,
and its limits, would seem worthwhile for two reasons. First, it will
cast light on just how close a tie the contractual relation is: on how
far English law is away from the Roman concept of
(‘
good faith
”
in contractual dealings.2 This dissolves really into an inquiry as to
how far one party will be allowed to put his own selfish interests
ahead of those of his contractual partner. For when a party does
something which interferes with the performance of the contract,
or
the benefit the other party hoped to get from
it,
his action is
seldom contumacious; he has simply decided that some other interest
of his own deserves first preference. Secondly,
it
ought also to cast
light on that difficult but important topic, the criteria by which the
courts imply terms in contracts. For a
(‘
duty of co-operation
”
being seldom expressly provided for, such a duty will normally be
pleaded as an
((
implied term
”
of the contract: the convention
that the parties alone can create duties in contract will dictate that.
((
Co-operation
”
is
a
vague term, and can be used
to
cover a
wide range of situations. However, the topic may be divided into
two main parts for convenience of examination. The first deals with
A’s interference with
B’s
enjoyment of the subject-matter of the
contract, and the second with
A’s
interference with the actual
performance
of
the contract promises.
A.
INTERFERENCE
WITH
ENJOYMENT
OF
SUBJECT-MATTER
It
may be said confidently enough that the law recognises a general
principle that if one man contracts to confer a benefit on another,
he must not do an act which substantially detracts from the other’s
enjoyment
of
that benefit. This would be virtually to take away
with one hand what one had given with the other. The principle
has been described by high authority as one of 6‘common
honesty,” but no doubt it is reinforced by factors of public policy
as well: business could not be carried on smoothly
if
a tradesman
could not rely on getting the full benefit from his contract.
1
Principles
of
the Law
of
Contract,
p.
262.
See
also
Sutton and Shannon on
Conffacts,
Gth
ed.,
p.
108
and
Mona
Oil
Equipment
v.
Rhodesia Railways Ltd.
[1949] 2
All
E.R.
1014, 1018,
per
Devlin
J.
1
See
Powell,
‘* Good
Faith
in Contracts
”
(1956)
9
CurTent
Legal Problems
16.
Harmer
v.
Jumbil
(Ni
eria) Tin Areas Ltd.
[1921 1
Ch.
200,
226.
per
Younger
L.J.
See
also
%rd
Macnaghten
in
Trego
v.
If
unt
[l896]
A.C.
7,
2fi.
ago
JULY
1068
CONTRACTUAL
CO-OPERATION
AND
IMPLIED
TERM
891
It
is doubtful, however, whether this principle is entitled to the
name of a
“
rule
of
law
”
which attaches to all contracts.
It
is
rather an inarticulate premise which underlies legal reasoning, and
which may appear in a variety of guises.
In
two fields in particular
it
has crystallised into a well-known rule, the rule that one must not
‘‘
derogate from one’s grant.” One of these is the contract for the
sale of a business, where it is well established that the vendor must
not later solicit his old customers himself, thus effectually destroying
the real object of the sale.’ The other is the contract for the grant of
an interest in land, whether a conveyance
or
a lease, where
it
is well
established that the grantor must not use land retained by him
“
in
such a way as to render the land unfit
or
materially less
fit
”
for
the
purpose for which the grantee wants to use
it.5
A
common example
is the grant
of
land for building, where the grantor will be enjoined
from building
on
his
own
land in such a way as to obstruct the lights
of the grantee;
*
another is the grant of
a
lease
for
the purpose
of
carrying
on
a trade,
in
which case the grantor will not be allowed to
indulge
in
any activity which substantially interferes with the
trade.’
But these are just the best-known illustrations
of
the operation
of
the principle. They are instances where there have been enough
precedents for one to be able to define the obligation at least roughly,
and to make
it
the natural thing to refer to this obligation as a
“
rule
of law.” The principle also appears as
a
settled rule, but under
a
different appellation,
in
what is known as the
‘‘
implied covenant
for quiet enjoyment
)’
in the law relating to leases.8 This
“
implied
covenant
”
has
in
the course
of
centuries of litigation been fairly well
defmed;
it
is nothing more
nor
less than a rule
of
the common law.
Its boundaries overlap quite substantially with those of the
obligation not to derogate from grant, and
in
some cases either may
be pleaded.0
The principle has solidified in other specific cases as well.
For
instance,
it
may now be treated as a rule of law that
a
seller of
4
See
eEp&fblly
Labouchere
v.
Dawson
(1879)
L.R.
13
Eq.
322;
Trego
v.
Hunt
[l896]
A.C. 7;
Curl Bros. Ltd.
v.
Webster
[1904]
1
Ch. 686.
6
The quotation
is
from
Browns
v.
Flower
[1911]
1
Ch. 219,
2‘28,
er
Parker
J.
6
Palmer
V.
Fletcher
(1663)
1
Lev.
122;
Rosewall
v.
Prior
(17&)
6
Mod.Rep.
116;
Myers
V.
Cutterson
(1889) 48 Ch.D. 470;
Phillips
v.
Low
[l899]
1
Ch. 47.
Cf.
Birmingham. Dudley
d
District Banking
Co.
v.
Ross
(1888)
38
Ch.D.
295;
Quicke
v.
Chapman
[1903]
1
Ch. 669.
Harmer
v.
Jumbil (Nigeria) Tin Areas Ltd.
[192l]
1
Ch.
200;
Aldin
v.
Latimer
Clark, Muirhead
d
Co.
[l894]
9
Ch. 437
;
Cable
v.
Bryant
[1908]
1
Ch. 269.
C
.
Lyttleton Times
v.
Warner8
[1907] A.C. 476;
Robinson
v.
Kiloeft
(188
8
)
41
Ch.D.
69.
For
a
discussion of the principle, see Megarry and Wade,
Law
of
Real PropeTty
(3rd ed., 1966), pp. 663
et
seq.;
Elliott (1964)
80
L.Q.R.
244.
*
For
useful
surveys
of
this implied
covenant,
see
Woodfall,
Landlord and
Tenant,
26th
ed.,
Chap.
la,
8.
11;
Fox,
Landlord and Tenant,
8th ed., p.
132
et seq;
Hill and Redman,
Law
of
Landlord and Tenant,
14th
ed., p.
190
st
seu.
@
See
Malzy
v.
Eichholz
[19161
2
R.B.
308;
Robinson
v.
Kilcert
(1889) 41
Ch.D. 89.
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