what he believes to be his obligations under the contract. Where there is part performance on one side, the other party is likely to have received some valuable benefit for which it is reasonable that he should pay. Likewise, the part performer may be seen to have relied to his detriment on the words or actions of the other party. In British Bank for Foreign Trade v Novinex, the defendants had been introduced to clients by the plaintiffs and a contract between those clients and the defendants had followed. The defendants further agreed to pay an unspecified commission to the plaintiffs in respect of any follow-up orders which were attributable to the initial introduction. Such orders were placed, but the defendants denied liability to pay commission on the ground that there was no legally enforceable agreement because of the vagueness of the language used by the parties. The Court of Appeal held that a term could be implied to the effect that the defendants would pay a reasonable commission, the consideration for which was the plaintiffs’ rendering of a valuable service which was of benefit to the defendants: British Bank for Foreign Trade v Novinex [1949] 1 All ER 155, CA, p 158

doi:10.4324/9781843141518-109

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what he believes to be his obligations under the contract. Where there is part performance on one side, the other party is likely to have received some valuable benefit for which it is reasonable that he should pay. Likewise, the part performer may be seen to have relied to his detriment on the words or actions of the other party. In British Bank for Foreign Trade v Novinex, the defendants had been introduced to clients by the plaintiffs and a contract between those clients and the defendants had followed. The defendants further agreed to pay an unspecified commission to the plaintiffs in respect of any follow-up orders which were attributable to the initial introduction. Such orders were placed, but the defendants denied liability to pay commission on the ground that there was no legally enforceable agreement because of the vagueness of the language used by the parties. The Court of Appeal held that a term could be implied to the effect that the defendants would pay a reasonable commission, the consideration for which was the plaintiffs’ rendering of a valuable service which was of benefit to the defendants: British Bank for Foreign Trade v Novinex [1949] 1 All ER 155, CA, p 158

ABSTRACT

British Bank for Foreign Trade v Novinex [1949] 1 All ER 155, CA, p 158 Cohen LJ: I turn next to the main question. Is this an enforceable agreement? A number of authorities have been cited to us, to which I do not propose to refer in detail, because, in my view, the effect of the authorities is correctly stated in the learned judge’s judgment where he says: ‘The principle to be deduced from the cases is that, if there is an essential term which has yet to be agreed and there is no express or implied provision for its solution, the result in point of law is that there is no binding contract. In seeing whether there is an implied provision for its solution, however, there is a difference between an arrangement which is wholly executory on both sides, and one which has been executed on one side or the other. In the ordinary way, if there is an arrangement to supply goods at a price “to be agreed”, or to perform services on terms “to be agreed”, then, although, while the matter is still executory there may be no binding contract, nevertheless, if it is executed on one side, that is, if the one does his part without having come to an agreement as to the price or the terms, then the law will say that there is necessarily implied from the conduct of the parties a contract that, in default of agreement, a reasonable sum is to be paid.’