Marks and Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Limited
The eagerly awaited Supreme Court judgment in the dispute between M&S and BNP Paribas was delivered at the beginning of the month. This case centred on the law of implied contract terms and specifically whether M&S was entitled to the repayment of advance rent paid to BNP Paribas after M&S served a break notice to terminate the lease of its head office. The High Court had implied a term into the lease allowing M&S to reclaim the rent, but this decision was overturned by the Court of Appeal who disagreed.
M&S took its appeal to the Supreme Court which upheld the Court of Appeal’s decision that there was no implied term that the rent should be repayable, because one was not strictly necessary in order for the lease to make commercial sense.
In dismissing the appeal, the Court re-affirmed that a term will only be implied into a contract if it is so obvious it goes without saying or if it is necessary to give business efficacy to the contract.
This case will impact upon landlord and tenant law and contract law. On the specific issue of break clauses and rent apportionments, it upholds the widely accepted view, prior to the controversial High Court decision, that without an express apportionment provision, the tenant is not entitled to a refund of rent paid in advance.
The decision emphasises the need for tenants to be properly advised on their break clauses which should contain clear, express repayment provisions.