Uncertainty, Opportunism and the Intermediate Term: The Hong Kong Fir Principle in English and Irish Contract Law
![handle is hein.journals/hiblj14 and id is 106 raw text is: Uncertainty, Opportunism and the
Intermediate Term: The Hong Kong Fir
Principle in English and Irish Contract Law
JAMES C. FISHER
Introduction and Argument
In addition to his many other influential contributions to the common law
of England, Diplock LJ (as he then was) has been credited with having
illuminated the existence1 of what have subsequently become known as
intermediate, or innominate, contractual terms in his seminal judgment in
Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd2 [hereinafter
Hong Kong Fir]. So-called intermediate terms are those terms of a contract
whose breach will sometimes, but not always, give the promisee a right to
terminate the contract in addition to a common law action for damages
which automatically arises on breach of contract by the promisor.
The influence of the decision in Hong Kong Fir has spread far beyond its
native jurisdiction. Since the decision in Irish Telephone Rentals Ltd v Irish
Civil Service Building Society Ltd3 [hereinafter Irish Telephone Rentals], the
intermediate term has formed part of Irish contract law in addition to the
law of England and Wales. More recently still the Hong Kong Fir principle
has been formally welcomed into Australian jurisprudence, the High Court
of Australia having held in the case of Koompahtoo Local Aboriginal Land
Council v Sanpine4 [hereinafter Koompahtoo] that the intermediate term
forms part of the common law of Australia.
The recognition of intermediate terms has been widely applauded
for reducing the ability of promisees opportunistically to exploit trivial
breaches of the promisor's contractual obligations in order to terminate
their contracts for reasons in fact unrelated to the consequences of the
breach. This is most tempting when, for whatever reason, it has become
more profitable to walk away from the contract than to claim damages for
the breach and maintain the contractual relationship.
In opposition to the widespread support enjoyed by Diplock LJ's
judgment and the development of the intermediate term, it will be argued
Bunge Corporation v Tradax Export SA [1981] 1 W.L.R. 711 at 714, per Lord
Wilberforce [hereinafter Bunge v Tradax]
2 Hong Kong Fir Shipping Co Ltd v Kawasaki Kisen Kaisha Ltd [1962] 2 Q.B. 26
1 Irish Telephone Rentals Ltd v Irish Civil Service Building Society Ltd [1991] I.L.R.M.
880
4 Koompahtoo Local Aboriginal Land Council v Sanpine Pty Limited [2007] HCA 61](ViewImageLocal?handle=hein.journals/hiblj14&div=9&collection=&method=preview&ext=.png&size=3)
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Uncertainty, Opportunism and the Intermediate Term: The Hong Kong Fir Principle in English and Irish Contract Law
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