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SIr, I cannot understand judicially implied terms and the business efficacy test ( Moorcock) Why does the courts add terms and whaat happened with the ship moorcock ? Thanks a lot
The word ‘judicially’ when applied to the word ‘term’ means that, although the term is not specifically included within the contract, the courts are prepared to imply that term into the contract because otherwise the contract would not make sense – it would fail the business efficacy test
The Moorcock was chartered to deliver a cargo of pig-iron to a specified wharf
The wharf was in a tidal stretch of river and close by there was a sand bank
When the Moorcock approached the wharf it ran aground on the sand bank
No problem, we had been told that there was a sand bank there so we’ll just have to wait for the tide to stop ebbing and start to flow again and then we shall float off and be able to deliver the pig-iron
By telling us about the sand bank it was implied that the delivery could be completed safely even though we may have to sit and wait for a favourable tide
But we hadn’t been told about the sharp rocks hidden by the sand and the Moorcock suffered damage
Because the contract was entered into in good faith on the understanding that the sand bank would not damage the boat, the court judicially implied a reassurance on behalf of the wharf owner that the delivery would be safe
And it wasn’t
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