Ratio Decidendi
A term will be implied into a contract where it is necessary to give business efficacy to the contract — that is, where without the term the contract would lack commercial or practical coherence.
Facts
The defendants owned a wharf where the plaintiff's vessel was moored for unloading. At low tide the vessel settled on a ridge of hard ground and was damaged. There was no express warranty about the safety of the riverbed.
Judgment Summary
The Court of Appeal implied a term that the wharf owners had taken reasonable care to ascertain that the riverbed was safe. Bowen LJ held that the term was necessary to give the contract business efficacy.
Key Quotes
"In business transactions what the law desires to effect by the implication is to give such business efficacy to the transaction as must have been intended at all events by both parties."
— Bowen LJ
Subsequent Treatment
The business efficacy test remains one of the two tests for implied terms (alongside the officious bystander test from Shirley v Whitworth).