WN Hillas & Co v Arcos Ltd
House of Lords
Citations: [1932] UKHL 2; (1932) 147 LT 503.
Facts
The claimant sued the defendant for breach of a written contract providing the claimant an option to purchase Russian softwood timber from the defendant. The defendant argued that the contract was invalid, because the clause the claimant relied on did not sufficiently describe the goods to be sold. There are two kinds of Russian softwood, and within the two categories there are various qualities. Meanwhile, the relevant contract term merely referred to ‘standards of fair specification’. The defendant therefore contended that the agreement was void for incompleteness and uncertainty.
Issue(s)
- Was the contract void for uncertainty?
Decision
The House of Lords held in favour of the claimant. It was necessary to imply a reference to ‘softwood’ into the clause. In light of the other terms of the contract, the court interpreted ‘fair specification’ to mean that the defendant should supply Russian softwood distributed over the various kinds, qualities and sizes for the 1930 season. Since this was capable of being assessed objectively, the subject matter of the contract was sufficiently certain. The contract was not void for uncertainty.
This Case is Authority For…
If an objective meaning can be attributed to a clause using the normal principles of interpretation and implication, the contract will not be void for uncertainty. However, the court should not go as far as to make a contract for the parties.
Other
Lord Thankerton doubted whether the phrase ‘fair specification’ had any objective meaning. However, in light of the need to uphold commercial agreements and the fact that the parties clearly thought they had a contract, he agreed with the majority’s interpretation of the term.
