Court Refuses to Imply Contract Terms

In the case of St Christopher School (Letchworth) Ltd v Schymanski and another, between September 2007 and April 2010 the defendants' sons attended the claimant school. The parents signed forms accepting the offers of places and acknowledging that they were individually and jointly responsible for payment of the school's fees. One clause stated that the parents undertook to pay the fees which applied from time to time. By another clause the school stipulated: 'We reserve the right to refuse to allow your child to attend the School or to withhold any references while fees or supplemental charges remain unpaid. Simple interest may be charged on a day-to-day basis on fees which are unpaid. … You consent to our informing any other school or educational establishment to which you propose to send your child of any outstanding fees'. By another clause the school required a term's notice in writing, or the payment of a term's fees in lieu of notice, if a child was to be withdrawn from the school. The school's obligations to the parents were set out in a separate clause.

The school brought a claim for unpaid fees for the spring and summer terms, amounting in total to £23,231.10, together with interest. The parents contended that the clause containing the school’s obligations amounted to a warranty and/or condition of the contract, and that “compliance by the claimant to the same went to the fundamental root of the contract, permitting the defendants to repudiate and/or rescind the contract”. Further, the parents also contended for eleven implied terms of the contract. The parents alleged that the school was not entitled to recover the unpaid fees because it had acted in fundamental breach of contract, entitling the parents to rescind and/or repudiate the contract. Twenty-one allegations of breach of contract were alleged, all of which were denied. The parents alleged that those breaches of contract had caused them loss and damage, in particular because they had suffered loss of earnings, and incurred the costs of engaging home tutors, to provide the boys with education following their withdrawal from the school. Damages were also claimed for alleged distress. The parents also pleaded direct racial discrimination

It was necessary for the court to decide:

  1. whether the school had acted in breach of any of the contracts between the parties;
  2. whether any such breach discharged the relevant contract(s) and so entitled the parents to withhold the fees otherwise payable;
  3. whether any such breach caused the parents loss and damage; and (iv) if so, whether that loss and damage was recoverable.

The claim by the school would be allowed.

The court could not imply a term merely because the court felt that its inclusion would be a desirable addition to the contract. Once the parties had made their agreement, the purpose of the court was to find the true meaning of that agreement, not to try to improve it. A term could therefore only be implied if, taking the agreement as a whole, the implied term reflected what the agreement would reasonably be understood to mean. Thus a term would only be implied if the parties had to have intended it to form part of their agreement, even though they had not said so. There were different ways in which the test for implying a term had been formulated:

  1. it had to be reasonable and equitable;
  2. it had to be necessary to give business efficacy to the contract, so that no term would be implied if the contract is effective without it;
  3. it had to be so obvious that 'it goes without saying';
  4. it must be capable of clear expression;
  5. it must not contradict any express term of the contract.

The court should not imply any of the terms for which the parents contended as the suggested implied terms either added nothing to clause 7 of the agreements, and were therefore not necessary; or they had done no more than restate the school's admitted contractual and statutory obligations, and were therefore redundant; or they were so vague and imprecise that they could not properly be implied by the court. The parents had received benefits under each of the agreements, and there had not been a total failure of consideration. There had been no evidence of bullying or victimisation, and no evidence that of racist motivation or any discrimination was on grounds of race. On the facts and evidence, the school had not acted in breach of any of its three contracts. The defence and counterclaim had therefore to fail.

 

Nick Barnett

Published on 07/08/2014

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