Lloyd's Maritime and Commercial Law Quarterly


Julian Ghosh *

The notion of a so-called “Braganza duty” is now entrenched in English contract law. But the Supreme Court’s approach, applying Wednesbury to private contracts, to identify implied terms, is both wrong in principle and has been problematic in application. And the issue could have been more simply and better addressed by established private law techniques of construction, terms implied in fact and (perhaps more controversially) good faith. Indeed, any one of these latter notions is a more satisfactory basis to explain the court’s actual conclusions (both for the majority and the minority) in Braganza, rather than an application of Wednesbury.


In Braganza 1 the Supreme Court was faced with a real problem of at least potential “abuse” of certain contractual powers. It considered this problem with reference to the two-limbed test for challenging the exercise of administrative powers (“Wednesbury-process rationality” and “Wednesbury-outcome rationality”) laid down by the Court of Appeal in Wednesbury,2 ie:
“[1] whether they have taken into account matters which they ought not to take into account, or conversely, have refused to take into account or neglected to take into account matters which they ought to take into account. [2] Once that question is answered in favour of the local authority, it may still be possible to say that, although the local authority have kept within the four corners of the matters which they ought to consider, they have nevertheless come to a conclusion so unreasonable that no reasonable authority could ever have come to it.”

Public Law Norms in Private Law Contracts


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