Cases - Shirlaw v Southern Foundries (1926) Ltd

Record details

Name

Shirlaw v Southern Foundries (1926) Ltd

Date

[1939]

Citation

2 KB 206 CA

Keywords

Contract – company – implied terms – test for implied terms - officious bystander – articles of association – article providing that managing director removable in same manner as other directors – whether implied term that managing director irremovable during fixed term – whether implied term giving power to alter to articles

Summary

This case is the authority for the 'officious bystander test' in relation to implied terms, which was expressed as follows:

'Prima facie that which in any contract is left to be implied and need not be expressed is something so obvious that it goes without saying; so that, if while one of the parties were making their bargain, an officious bystander were to suggest some express provision for it in the agreement, they would testily suppress him with a common, "oh, of course".'