Crossley v Faithful & Gould Holdings Ltd [2004] EWCA Civ 293 is an English contract law

English contract law

English contract law is a body of law regulating contracts in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries across the Commonwealth , and the United States...

 case, concerning implied terms

Implied terms in English law

Implied terms in English law refers to the practice of setting down default rules for contracts, when terms that contracting parties expressly choose run out, or setting down mandatory rules which operate to override terms that the parties may have themselves chosen...

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Facts

Mr Crossley was a director of Faithful & Gould Ltd. He suffered a nervous breakdown. Under the firm’s disability insurance scheme, so long as he was an employee he was entitled to benefits while totally unable to work. He tendered his resignation in terms suggested by Faithful Ltd. Unfortunately that terminated his right to benefits. The scheme insurer stopped payments after one year. Was there an ‘implied term of any contract of employment that the employer will take reasonable care for the economic well being of his employee.’

Judgment

Dyson LJ, for terms implied in law one should not ‘focus on the elusive concept of necessity’ which is ‘somewhat protean’ but should ‘recognise that, to some extent at least, the existence and scope of standardised implied terms raise questions of reasonableness, fairness and the balancing of competing policy considerations.’ But it was inappropriate to imply such a broad term, and ‘such an implied term would impose an unfair and unreasonable burden on employers.’ Their interests conflict with employees so it is unreasonable for employers ‘to have regard to the employee’s financial circumstances when he takes lawful business decisions which may affect the employee’s economic welfare.’ The employer does not need to ‘act as his employee’s financial adviser.’ So there were ‘no obvious policy reasons to impose on an employer the general duty to protect his employee’s economic well-being.’

Sir Andrew Morrit VC, Thomas LJ concurred.

See also

• Scally v Southern Health and Social Services Board
  Scally v Southern Health and Social Services Board
  Scally v Southern Health and Social Services Board [1992] 1 AC 294 is an English contract law case, relevant for pensions and UK labour law, concerning implied terms.-Facts:...
  
  [1992] 1 AC 294
• Equitable Life Assurance Society v Hyman
  Equitable Life Assurance Society v Hyman
  Equitable Life Assurance Society v Hyman [2000] is an English contract law case, concerning implied terms.-Facts:Equitable Life issued ‘with profits’ life assurance policies, which are a way of saving for retirement. If policy holders took benefits as a taxable annuity Equitable Life Assurance...
  
  [2002] 1 AC 408
• Attorney General of Belize v Belize Telecom Ltd
  Attorney General of Belize v Belize Telecom Ltd
  Attorney General of Belize v Belize Telecom Ltd [2009] is a case on which the Privy Council gave advice, relevant for contract law, company law and constitutional law...