Implied duty of co-operation in shipbuilding and offshore construction contracts — a change in the law?

By Chris Kidd

In any construction project, a degree of co-operation will be required between the buyer and the builder to facilitate successful completion of the project. It is common to provide expressly in the contract in what specific ways the parties, in particular the buyer, will co-operate, for instance by allowing access to the site and providing timely instructions or approvals. Where co-operation from one of the parties is required but it is not addressed by the express terms of the contract, a duty of co-operation may nevertheless be implied in particular circumstances.

Terms can be implied into contracts in a number of circumstances. When determining whether a term should be implied, the courts or arbitrators will consider what the contract, read as a whole against the relevant background, would reasonably be understood to mean and whether it is necessary to imply a term to make the contract work or because it is usual for the term to be implied in the circumstances. In either case, a term will only be implied where it is both necessary and reasonable to do so in the circumstances and by reference to the terms that have been agreed…

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