The Almond Flavour in BP Refinery v Shire of Hastings (BP Refinery v Philips Electronique)
Added on 2020-03-02
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Partial Title 1INTRODUCTION TO BUSINESSLAW AND ETHICSBy NameCourseProfessorUniversityCity/StateDate
Partial Title 21. The issue is whether it was a term of the contract, whether the Almond –flour would be gluten free.In BP Refinery v Shire of Hastings (BP Refinery), as extended in Philips Electronique v British Sky Broadcasting Ltd (Philips), Lord Neuberger gave conditions which are necessary forterms to be implied in a contract; the terms include;It must be very obvious that it goes without sayingThe terms should not contradict a term which is expressly stated in the contractThe term should be reasonableThe term should promote the efficiency of the businessThe terms should also be capable of a clear expression.The contract had gluten-free Almond as a term because when Mikaela calls Ricky, she asks iftheir Almond flour is gluten- free, and Ricky affirms that. So it is a presumed factor by Mikaela while making an order that all the Almond flour sold by Tower flours is gluten free. Mikaela relies on the statement made by Ricky to make her order, despite the lack of clarification at the point of offer and acceptance, it is a silent term in the contract. There is an implied term which is pretty obvious to both parties, just not stated in the contract (Boella, Boella,. and Pannett, 2009 p.115). 2. The issue is whether Dan and Jacob had an implied gluten-free term in their contract.Given the background of the parties, the court would take the position of a reasonable person to determine whether such an implied term exists. Looking at the tests in the case of Phillips starting with the business efficacy test, we question whether the gluten –free flour gives
Partial Title 3efficacy to the business. The business efficacy test is seen in The Moorcock (1889) 14 PD 64, where the court concluded that if a business makes sense without a term, then it will not be implied. In this case the business between Dan, Jacob and Mikaela makes sense without the gluten- free term. The necessity test requires that a term is fulfilled, without inputting a particularterm. In the case of Mikaela, we see her making the cakes without using gluten-free flour thus fulfilling the contractual obligations (Stone & Devenney, 2014 p.240).The bystander's test requires that a term is obvious that it goes without saying. In the caseof Mikaela, Dan and Jacob, the term that they wanted flour which is gluten- free is not obvious toMikaela, since it was not discussed. It is until the contractual obligations are fulfilled that we realize, Dan and Jacob anticipated that their almond cake would be gluten free. Hence it is not anobvious term to a bystander (Poole, 2012, p.35).Dan and Jacob had no contract to state that their cake should be gluten- free. They did notexpressly request for gluten free flour, even though they requested for almond flour. There is an express term in the contract requesting almond flour; there are no other terms because Dan and Jacob did not take due diligence to ask whether the flour was gluten free. If their request for almond flour were based on Mikaela's assurance that the flour was gluten free, then they would have had an implied term in the contract relying on the fact that the flour was gluten- free. Dan and Jacob just requested almond flour, not necessarily gluten- free. Thus a gluten-free contract did not exist, but just a contract requiring them to be supplied with almond cake (Stone, 2010 p.248).
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