In Barton and others v Morris and another in place of Gwyn Jones (deceased) [2023] UKSC 3 the court held that a contract which provided for an introduction fee to be paid if a property sold for a certain amount precluded any implied terms or a claim in unjust enrichment when the property unexpectedly sold for less than that amount.

The Case

The case concerned the sale of a property (the “Property”) that was owned by Foxpace Limited (“Foxpace”).  Foxpace entered into an oral contract, to pay an individual,  Mr Barton, £1.2m in the event that Mr Barton introduced a buyer and the Property was sold for £6.5m.  The parties did not specify what was to happen if the Property sold for less than £6.5 million.  Documents were drawn up for the sale for £6.55 million. However, it later came to light that the Property fell within an area safeguarded for the purpose of the construction of the HS2 rail link. As a result, the price for the Property was reduced to £6 million.

Foxpace argued that this meant that the success fee had not been triggered and there was no contractual obligation to pay anything to Mr Barton. However, Foxpace offered to pay Mr Barton £400,000 as a goodwill gesture, which he rejected. Mr Barton subsequently commenced proceedings.

Decision

The court found that there was no express term creating an obligation on Foxpace to pay Mr Barton a fee if the Property was sold for less than £6.55 million. The majority also found that there was no implied term that entitled Mr Barton to a payment if he introduced a successful buyer but the Property was sold for less than £6.55 million.  It was noted that such a term would contradict the express terms of the contract. It was not possible to establish what fee the parties would have agreed in those circumstances and neither was such a term so obvious that it went without saying.

The court also considered s15 of the Supply of Goods and Services Act 1982 which provides that, if consideration is not determined by a contract, a term is implied that the contracting party will pay a reasonable charge to the supplier. However, the majority held that this section did not apply in the circumstances of this case because consideration was determined by the contract even if not considering the exact circumstances that arose.

Considerations

The English courts adopt a strict approach when asked to imply a term into a contract and the Supreme Court reiterated this approach in this case.   No term will be implied if it contradicts any express terms of the contract and the term to be implied must be required for business efficacy or be so obvious that it goes without saying.

What is interesting about this case, demonstrating the nuances and uncertainties in applying the law in this area, is that the courts at each level of appeal reached different results and there were dissenting opinions in the Supreme Court as to whether a contract term should be implied and whether a claim in unjust enrichment could be made out.

Consequently, the key point to remember is that a party cannot rely on the courts implying a provision into a contract. If a provision is required, it should be expressly included.