## Facts

- A ship owner contracted with a jetty owner for use of the jetty on the River Thames to unload cargo.
- Vessels using the jetty necessarily grounded on the riverbed at low tide, a bed not owned or controlled by the jetty owner.
- The ship Moorcock settled on a hard ridge during low tide and was damaged.
- No express clause addressed berth safety, but the jetty owner could have investigated the riverbed’s condition.
- The ship owner claimed an implied contractual term that the jetty owner would take reasonable care to ensure the berth’s safety, seeking damages for the loss.

## Issues

1. Whether a term should be implied that the jetty owner would take reasonable care to ascertain the safety of the berth.
2. Whether implication of such a term was necessary to give the contract business efficacy rather than merely desirable.
3. If implied, whether the jetty owner’s failure to exercise reasonable care rendered him liable for the vessel’s damage.

## Decision

- The Court of Appeal implied a term that the jetty owner would exercise reasonable care to ensure the berth was safe for the vessel to lie aground.
- The term was necessary and obvious to make the contract workable; without it the agreement lacked commercial sense.
- Because reasonable care had not been taken, the jetty owner was liable for the damage sustained by Moorcock.

## Legal Principles

- Business efficacy test: a term is implied only when essential to make the contract effective in a commercial context.
- Implied terms must be “necessary and obvious”, not merely reasonable or convenient.
- Courts examine the presumed intentions of business parties and the practical circumstances of performance when deciding implication.
- The case establishes that responsibility may be implied even where a party lacks ownership or direct control, provided it can reasonably investigate and manage the relevant risk.

## Conclusion

The Court of Appeal held that to render the agreement commercially workable it was essential to imply a term obliging the jetty owner to take reasonable care for berth safety. Failure to meet that duty made the jetty owner liable for the vessel’s damage, and the decision remains the leading authority for the business efficacy test governing implied contractual terms.

Re The Moorcock (1889) 14 PD 64