Mackay v Dick - 1881

Mackay v Dick (1881) 6 App Cas 251

Implied duty of cooperation in a contract for sale.

Facts

Mr. Mackay was a contractor for the construction of a railway branch line of Carfin Cutting, who concluded a contract of sale with Dick and Stevenson, an engineering company, for a steam-excavating machine, valued at £1115 pursuant to a number of contractual terms. One term concerned the testing of the machine at Carfin; however, Mackay was not ready to test the machine after it was manufactured. Following an alleged flaw in the machine, Mackay denied payment of the purchase price alleging non-conformity to the contract. Dick and Stevenson sued for the price, alleging the fault of the contractors for not testing at Carfin.

Issues

The question arose as to whether the contract was considered satisfied despite the alleged non-conformity to the terms of the contract by the manufacturers.

Decision/Outcome

The Court stipulated the general rule that, when a written contract provides obligations which are dependant on both parties, “each agrees to do all that is necessary to be done on his part for the carrying out of that thing, though there may be no express words to that effect.” (p 263). In the construction of a contract for sale, in which the acceptance of the item and payment of the part thereto is conditional upon certain terms by the seller, there is an implied duty of cooperation that the buyer will do all that which is necessary to ensure that the seller fulfils the contractual terms. On the facts, the Court held that the buyer, Mackay, did not fulfil his duty of cooperation concerning the testing of the machine at Carfin, preventing the seller from fulfilling the condition of sale; accordingly, the seller, Dick and Stevenson, fulfilled their part and the contract must be considered satisfied with payment due accordingly.

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