Barton V Morris: Where Contract Ends And Unjust Enrichment Begins

• Published date: 22 May 2023
• Subject Matter: Corporate/Commercial Law, Contracts and Commercial Law
• Law Firm: Norton Rose Fulbright
• Author: Mr Adam Sanitt

The Supreme Court has recently given guidance in Barton & Ors v Morris & Anor [2023] UKSC 3 on where a contract ends and unjust enrichment begins.

The facts are deceptively simple. An agreement provided for payment of commission of '1.2 million on sale of a property for '6.5 million or more. The property was sold for '6 million. The introducer argued that they should receive an amount of commission.

By a majority of three to two, the Supreme Court held that no commission was payable. They refused to imply a term, either in law or in fact, and held that there was no claim in unjust enrichment:

"When parties stipulate in their contract the circumstances that must occur in order to impose a legal obligation on one party to pay, they necessarily exclude any obligation to pay in the absence of those circumstances... This excludes not only an implied contractual term but a claim in unjust enrichment" (para 96)

Dissenting, Lord Leggatt would have implied a term in law, reasoning that the contract left a gap as to what should happen in the event of a sale below '6 million that could be filled by an implied term. Silence in the contract should be interpreted against a backdrop of the payment obligation that would otherwise have been implied. He agreed that unjust enrichment was inapplicable in relation to 'the subject matter of a contract'.

Lord Burrows, also dissenting, would have allowed a claim in unjust enrichment if there had been no implied term. He identified the unjust factor as 'failure of basis' and stressed that here there was a unilateral contract. That is, there was no obligation to provide the services...