Baker Tilly (a firm) v Makar [2010] EWCA Civ 1411 Tacit terms and the common unexpressed intention of the parties to a contract : recent case law

• Published date: 01 January 2013
• Date: 01 January 2013
• Pages: 1088-1097
• DOI: 10.10520/EJC148569
• Author: S.J. Cornelius

Baker Tilly (a firm) v Makar

[2010] EWCA Civ 1411

Tacit terms and the common unexpressed intention of the parties to a contract

1Introduction

When parties conclude a contract, there is a glimmer of consensus and

when that contract is reduced to writing, at least in the English tradition,

elaborate terms are crafted with much care and precision from

established precedents and the skilled use of language to reflect the

agreement reached by the parties. But the glimmer of consensus

obscures the fact that there can hardly ever be complete agreement on

every minute detail of the contract and no matter how carefully or with

how much elaboration a contract is drafted, the ideal of a perfect contract

remains eternally beyond the reach of the drafter. No matter how clearly

the parties express themselves and no matter how well drafted a contract

may be, it is never beyond the realm of possibility that the contract may

yet contain some omission. There are various reasons why an omission

may occur: Unforeseen circumstances may arise; circumstances change;

parties change; needs change; conflicts of interest are ever present.

Whatever the reason, omissions arise with sufficient frequency to

warrant the existence of legal rules which explain in which circumstances

a court may supply an omission. This is often done by the implication of

certain unexpressed terms in a contract. The aim with this analysis is to

consider the various kinds of unexpressed terms that can be implied in a

contract from a comparative perspective against the backdrop of the

judgment of the England and Wales Court of Appeals (Civil Division) in

Baker Tilly (a firm) v Makar ([2010] EWCA Civ 1411).

2Facts

The defendant was the chief executive officer, executive deputy

chairperson and finance director of Triad Group PLC and held almost 30

per cent of the shares in Triad. In 2005, a major boardroom dispute arose