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Legal Terms - business efficacy test
Judicial implication is a technique occasionally employed by the court to infer provisions in a contractual agreement.The test is whether the term is necessary for business efficacy, that is, whether the contract requires the term to make (commercial) sense (The Moorcock [1889] 14 PD 64). If a contract is effective without a term, that term should not be assumed or inferred (Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and others [2015] UKSC 72).
Judicial implication is a technique occasionally employed by the court to infer provisions in a contractual agreement.The test is whether the term is necessary for business efficacy, that is, whether the contract requires the term to make (commercial) sense (The Moorcock [1889] 14 PD 64). If a contract is effective without a term, that term should not be assumed or inferred (Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Limited and others [2015] UKSC 72).
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