Termination - Construction Contracts - page 332

204 In what circumstances can an employer terminate on the
grounds of failure to proceed regularly and diligently even if the
contract does not require the contractor to do so?
Most JCT contracts contain a clause requiring the contractor to proceed regularly and dili-
gently. MW does not contain that kind of clause, but nevertheless the contract does allow
theemployertoterminatethecontractor'semploymentifitfailstoproceedregularlyanddi-
ligently. It may seem strange that a contractor can have no obligation to work regularly and
diligently, but yet there is a clause allowing for termination if the contractor fails to do so.
Thatcombinationhasalreadybeenconsideredbythecourtsinvariouscases,anditwascon-
sidered again in Leander Construction Ltd v Mulalley & Co Ltd . 4 In that case, Leander was
sub-contracted to Mulalley for groundworks on Mulalley's own terms. They provided that
Leander's employment could be terminated if it failed to proceed regularly and diligently,
but they did not expressly require Leander to work regularly and diligently.
MulalleyheldbackmoneyfromLeanderonthebasisoftwowithholdingnotices.Leander
tookactioninthecourttorecoverthemoney,andMulalleyarguedthatLeandershouldhave
worked in accordance with the dates in the Activity Schedule. Although those dates were
not contractually binding, Mulalley maintained that there was an implied term in the con-
tract that Leander would work regularly and diligently, and the dates in the Activity Sched-
ule were the best way of measuring that.
Animpliedtermisonethatisnotwrittenintothecontractbutwhichacourtwillsaymust
be implied into it. The courts will only do that in certain cases. For example, a term may be
implied if the contract will not work without it or if it is so obvious that a third party would
say that, of course, it is included. However, the courts will not imply a term just because
they think it is reasonable to do so or because they think it will improve the contract. Terms
will not be implied if there are express (specific, usually written) terms covering the same
things.
Inthiscase,thecourtrefusedtoimplythetermwhichMulalleyrequiredbecausethecourt
said it was not necessary to so in order to make the contract work. It worked perfectly well
without it.
ThesamecanbesaidaboutMWandMWD.Althoughinthosecontractsacontractorwho
fails to proceed regularly and diligently may face its employment being terminated, the fail-
ure is not a breach of contract. Its failure would not be grounds for termination at common
law,butonlybecausethecontracthasanexpressclausedealingwithit.Therefore,suchfail-
ure cannot be cited in support of some other claim against the contractor.