The Moorcock [1889]

The Moorcock [1889]

The Moorcock [1889] 14 PD 64 is a significant English contract law case that introduced an important test for implying terms into commercial agreements, particularly focusing on terms necessary for business efficacy. The case highlights the court's approach to determining implied terms based on the presumed intentions of the parties involved.

The case involved a contract between the owners of the ship The Moorcock and the wharf owners for space at a jetty to unload cargo. While docked, the ship sustained damage when the tide went down, causing it to hit a ridge. The ship owner argued that the wharf owners were responsible for ensuring the vessel's safety while docked. The wharf owners contended that there were no provisions in the contract regarding the vessel's safety, and they could not have foreseen the damage.

The court ruled in favour of the ship owner, holding that there was an implied term in the contract. This term required the wharf owners to take reasonable steps to ascertain the state of the riverbed adjacent to the jetty. This implied term was crucial for business efficacy and would have been in the contemplation of both parties. The court clarified that the implied term was not about guaranteeing a safe place to dock but ensuring that the wharf owners took reasonable steps to identify potential hazards.

The Moorcock case established the principle that terms can be implied into a contract to give it business efficacy, based on the presumed intentions of the parties. The implied term must be necessary and obvious, not merely desirable or reasonable. In business transactions, the law seeks to give effect to what both parties, as business people, must have intended.

Bowen LJ emphasised that implied warranties should be based on the presumed intentions of the parties and should aim to give business efficacy to the transaction. The goal is not to impose all perils on one side or emancipate one side from all chances of failure but to make each party legally responsible for what it must have contemplated in terms of perils or chances.

The Moorcock case has been widely cited in subsequent cases, becoming a foundational precedent in English contract law. It provides a framework for determining when terms can be implied into contracts to ensure business efficacy, and it clarifies that implied terms should be based on the presumed intentions of the parties in commercial transactions.
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