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Southern Foundries (1926) Ltd v Shirlaw [1940] AC 701 is an important English contract law and company law case. In the field of contracts it is well known for MacKinnon LJ's decision in the Court of Appeal, where he put forth the "officious bystander" formulation for determining what terms should be implied into agreements by the courts.
The officious bystander is a metaphorical figure of English law and legal fiction, developed by MacKinnon LJ in Southern Foundries (1926) Ltd v Shirlaw [1] to assist in determining when a term should be implied into an agreement. While the officious bystander test is not the overriding formulation in English law today, it provides a useful guide.
The expression has also been incorporated in Canadian patent jurisprudence, notably Beloit v.Valmet Oy [9] in its discussion of the test for obviousness. [10]In Australia, the "Clapham omnibus" expression has inspired the New South Wales and Victorian equivalents, "the man on the Bondi tram" (a now disused tram route in Sydney), [11] "the man on the Bourke Street tram" (), [12] and "the ...
For common law contracts, disputes over contract formation are subjected to what is known as the objective test of assent in order to determine whether a contract exists. This standard is also known as the officious bystander, reasonable bystander, reasonable third party, or reasonable person in the position of the party. [51]
Shirlaw v Southern Foundries Ltd [1939] 2 KB 206, 207 (terms shall be implied only when necessary "to give effect to the reasonable expectations of the parties" as interpreted by a neutral, reasonable third party – the "officious bystander" test)
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The presiding judge created a quaint concept of an officious bystander; if the officious bystander were to propose a term and both the parties would be likely to reply with a testy "oh, of course", the term is implied. Obviousness: The term is so obvious that it goes without saying. Furthermore, there must be one and only one thing that would ...
Liverpool City Council v Irwin [1976] UKHL 1 is a leading English contract law case concerning the basis on which courts may imply terms into contracts; in particular in relation to all types of tenancies (including leases of land), a term may be implied if required for a particular relationship, such as for the landlord to keep the stairwells clear in a tower block.