Officious bystander
Encyclopedia
The officious bystander is a metaphorical figure of English law
, developed by MacKinnon LJ in Southern Foundries (1926) Ltd v Shirlaw
to assist in determining when a term should be implied into an agreement. While the officious bystander test is not the overriding formulation in English law today, it provides a useful guide. The suggested approach is to imagine a nosey, officious bystander walking past two contracting parties and asking them, whether they would want to put some express term into the agreement. If the parties would instantly reply "of course" the term is apt for implication.
MacKinnon LJ wrote,
The test is outdated to the extent that it suggested implication was a process dependent on what contracting parties would have subjectively intended. The main problem is that people would often disagree, or one side's bargaining power
would be such that they could ignore the intentions of the other party. The rule now is that terms are implied to reflect the parties' reasonable expectations as a broader part of the process of objective, contextual construction. In AG of Belize v Belize Telecom Ltd Lord Hoffmann wrote the following.
English law
English law is the legal system of England and Wales, and is the basis of common law legal systems used in most Commonwealth countries and the United States except Louisiana...
, developed by MacKinnon LJ in Southern Foundries (1926) Ltd v Shirlaw
Southern Foundries (1926) Ltd v Shirlaw
Southern Foundries Ltd v Shirlaw [1940] AC 701 is an important English contract law and company law case. In the field of contracts it is well known for MacKinnon LJ's decision in the Court of Appeal, where he put forth the "officious bystander" formulation for determining what terms should be...
to assist in determining when a term should be implied into an agreement. While the officious bystander test is not the overriding formulation in English law today, it provides a useful guide. The suggested approach is to imagine a nosey, officious bystander walking past two contracting parties and asking them, whether they would want to put some express term into the agreement. If the parties would instantly reply "of course" the term is apt for implication.
Overview
In Southern Foundries (1926) Ltd v ShirlawSouthern Foundries (1926) Ltd v Shirlaw
Southern Foundries Ltd v Shirlaw [1940] AC 701 is an important English contract law and company law case. In the field of contracts it is well known for MacKinnon LJ's decision in the Court of Appeal, where he put forth the "officious bystander" formulation for determining what terms should be...
MacKinnon LJ wrote,
The test is outdated to the extent that it suggested implication was a process dependent on what contracting parties would have subjectively intended. The main problem is that people would often disagree, or one side's bargaining power
Inequality of bargaining power
Inequality of bargaining power is a concept used in social sciences and humanities, particularly law and economics to denote the situation where freedom of contract ceases to be real and markets fail....
would be such that they could ignore the intentions of the other party. The rule now is that terms are implied to reflect the parties' reasonable expectations as a broader part of the process of objective, contextual construction. In AG of Belize v Belize Telecom Ltd Lord Hoffmann wrote the following.