## Facts

- Owners of the ship The Moorcock contracted with a wharf owner for the vessel to discharge cargo at the wharf’s jetty on the River Thames.
- Vessels using the jetty necessarily settled on the riverbed at low tide.
- A ridge in the riverbed damaged the ship’s hull while she was aground.
- The written agreement was silent on responsibility for the condition of the riverbed or the safety of the berth.
- The shipowners sought damages, contending that the contract contained an implied term obliging the wharfinger to take reasonable care to provide a safe berth.

## Issues

1. Whether a term should be implied that the wharf owner would exercise reasonable care to ensure the berth was safe for the vessel.
2. In what circumstances courts may imply contractual terms not expressly stated, particularly whether necessity for business efficacy is the governing standard.

## Decision

- The Court of Appeal implied a term that the wharfinger would take reasonable care to ascertain and, so far as reasonable, secure the safety of the riverbed for the expected grounding.
- Breach of that implied term rendered the wharf owner liable for the damage to The Moorcock.
- The court formulated the business efficacy test: a term may be implied only when it is necessary and obvious to give the contract commercial effect, not merely because it seems fair or reasonable.

## Legal Principles

- Business efficacy test: a term is implied if, without it, the contract would be unworkable in the commercial sense contemplated by the parties.
- Necessity and obviousness are twin requirements; desirability alone is insufficient.
- Implied terms derive from the presumed intention of reasonable businesspeople, allocating risk in a manner consistent with the contract’s purpose.
- The decision distinguishes implied terms from express terms and from implication through custom (e.g., Hutton v Warren) or collateral contracts (e.g., City & Westminster Properties v Mudd).
- Subsequent case law on conditions, warranties, and representations continues to apply The Moorcock’s rationale when determining the status and content of contractual obligations.

## Conclusion

The Moorcock establishes that courts may insert only those terms which are both necessary and obvious to make a contract commercially workable; applying this rule, the Court of Appeal found an implied obligation on the wharf owner to ensure a safe berth and held him liable for the resulting damage.


Re The Moorcock (1889) 14 PD 64 (CA)