Two types of inconsistency
The Court of Appeal has refused to imply a term into a contract where it would be inconsistent with the operation an express term: Irish Bank Resolution Corporation Ltd v Camden Market Holdings Corp & Ors [2017] FICR 13. A bank was marketing loans of a borrower at the same time as the borrower was marketing properties developed with the loans. The borrower said the bank's marketing of the loans suggested they were distressed and reduced the value of the properties. It alleged there was an implied term in the loan agreement that the bank would not do anything to hinder the borrower's marketing of the properties.
The problem for the borrower was that there was an express term in the loan agreement which allowed the bank to market the loans for sale and to provide information about them to any potential buyer. The bank made a summary judgment application, arguing that the implied term was inconsistent with that express term, but the a judge held it was arguable the implied term was not inconsistent, and refused the application. The bank appealed.
Beatson LJ for the Court of Appeal reiterated that terms are not to be implied lightly, especially in long and detailed contracts and where the contract makes express provision about the issue. There are two forms of inconsistency between express and implied terms - linguistic and substantive. Here there was no linguistic inconsistency but the express and the implied terms could not operate together, therefore there was substantive inconsistency. The court allowed the appeal and entered summary judgment.
Read the full head note on Ford's International Commercial Reports here: [2017] FICR 13.
