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Legal Issues in Accounting - Duty of Good Faith
The Court of Appeal sought to find a construction of the words in above which accord with s 28 O (4) but that section is describing a right to take not more than the amount stated in the quota whereas the statement in the contract is referring to a right to take not less than the stated amount. The amount was not a definition of the subject-matter but only a description of it. Lord Clyde remarked that 'having agreed merely to a description of a future ITQ by reference to their expectation of its lowest amount, they must have intended to leave open the eventual amount of the quota to the changes and uncertainties of the future'.
Once it is accepted that presumed intention would be taken account in the construction of the contract, it is natural to understand that implied terms are as a rule based upon the presumed intention of the parties and should be founded upon reason. In Codelfa, Mason J denied the involvement of implied terms by arguing that 'the terms of the contract did not have the character of negotiations in the course of which the parties gradually evolved the terms of a bargain ultimately embodied in written form', rather they have been determined in advance by the Authority and by lodging its tender Codelfa accepted.... therefore, 'the relevant discussion reflects neither the preliminary consensus that merged into the written contract, nor statements made during the course of negotiations indicative of the unilateral intentions of each party' .
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- Legal Issues in Accounting - Duty of Good Faith
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