An entire agreement clause does not prevent the admissibility of extrinsic evidence

News

16/07/2019

In NHS Commissioning Board v (1) Dr Manjul Vasant (2) Dr Angelica Khera (3) Dr Gursharan Kalsi [2019] EWCA Civ 1245, the issue on appeal was whether NHS England was entitled to terminate contractual arrangements under which three dentists supplied an Intermediate Minor Oral Surgery (IMOS) service to the NHS under General Dental Services Contracts (GDS Contracts).

The GDS Contracts were varied by consent to include the provision of IMOS Services. NHS England asserted that they were entitled to terminate the IMOS Services without cause.

Lewison LJ (with whom Longmore and Coulson LJJ agreed) held that in order to determine whether the IMOS services formed part of the contract preventing termination without cause the court could have regard to extrinsic evidence to explain the meaning of unconventional expressions in a contract, especially where the expression in question is used in a particular sector of economic activity.

Further, an entire agreement clause does not preclude the implication of a term that is intrinsic to the agreement, or one that is necessary to give business efficacy to the contract.

The evidence demonstrated that NHS England intended the IMOS services to be included in the GDS Contracts.  The GDS Contracts did not permit termination without cause.

In respect of NHS England’s assertion that the GDS Contracts did not state a price for the services, Lewison LJ held it is a commonplace that in the case of a continuing contract for services in the course of performance the court will readily imply a term that a fair price will be paid for the services rendered. 

In any event, on the facts, the parties have actually agreed the price to be paid for each element of the IMOS service.

The Court of Appeal dismissed NHS England’s appeal.

Simon Butler represented the dentists.

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