Implied term - trade and custom relevant
Implied terms - courts may now take into account market practice
Historically the courts have taken regard of usage or custom to imply a term in a contract only where it is "notorious, certain and reasonable", and also, is something more than "mere trade practice".
In Thomas Crema v Cenkos Securities plc ("Cenkos") Mr Tomas was a stockbroker and Cenkos was a corporate finance adviser which specialised in raising capital for small and mid-cap companies. Cenkos agreed that Thomas Crema ("Mr Crema"), a sub-broker, would be paid a fee for raising funds for a venture capital company ("GPV"). Mr Crema was successful in raising the requisite funds for GPV, however, GPV then refused to pay Cenkos any commission, in breach of the contract between itself and Cenkos. As such, Cenkos did not pay any commission to Mr Crema, which would have been due to Mr Crema under a separate contract between himself and Cenkos.
Mr Crema issued proceedings against Cenkos, claiming that it was an implied term of the contract between himself and Cenkos that he was entitled to be paid his commission, notwithstanding the fact that Cenkos had not received payment of any commission from GPV.
The claim for commission failed because the Court of Appeal would not imply a term that Mr Crema should be paid commission even if the client, GPV, failed to pay the stockbroker. In otherwords the court was willing to take market practice into account, namely that sub-brokers do not get paid their commission if the corporate client failed to pay the stockbroker.