English Court Rejects Implied Term to Proceed Regularly and Diligently with Construction Work

27 January 2012

In Leander Construction Ltd v Mulalley & Co Ltd [2011] EWHC 3449 (TCC), the English Technology and Construction Court considered whether a term should be implied into a construction subcontract requiring the subcontractor, Leander, to proceed regularly and diligently with the works. The parties agreed that the subcontract did not contain any contractual terms as to interim performance, milestone dates or sectional completion.

His Honour Mr Justice Coulson referred to well established authority setting out the criteria that must be met before terms will be implied and affirmed that courts are generally slow to imply terms into a contract, particularly where there are already detailed terms and conditions. The Court confirmed that a term will only be implied into a contract where the term is:

• reasonable and equitable;

• necessary to give business efficiency to the contract;

• so obvious that it goes without saying;

• capable of clear expression; and

• not in conflict with any express term of the contract.

The Court rejected Mulalley’s submissions and concluded that, provided that the main contractual obligation is an obligation to complete by a certain date, it is unnecessary and unhelpful to impose other interim progress obligations on the contractor.

This case serves as a reminder that, in the absence of contractually binding interim milestones or other express provisions as to interim performance, a contractor can generally proceed with the works in the manner of its own choosing and will only be in breach of contract for delay if the work is completed later than the contractual date for completion.

The case can be read in full here.