By Jonathan Hew

The Supreme Court has clarified that, for a term to be implied into an agreement, it must be either necessary for business efficacy or so obvious that it goes without saying. This is a significant judgment for commercial practitioners and for those drafting or dealing with contracts generally.

Under English law, a court can imply terms into a contract to supplement its express provisions. However, the Privy Council’s decision in Attorney General of Belize and others v Belize Telecom Ltd and another [2009] UKPC 10 had led to uncertainty about the appropriate test for the implication of terms. The test has since been clarified by the Supreme Court in Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and another [2015] UKSC 72.