Moorhead v Brennan (t/as Primavera Press) (1991) 20 IPR 161
Contracts; contents of a contract; agreed terms, terms implied ad hoc.
Facts: Moorhead, author of the book 'Remember the Tarantella', entered into a contract with a publisher, Brennan. The contract gave Brennan the exclusive right to produce and sell the book, and to licence other publishers to do so. Moorhead was to receive 50% of the receipts from editions published by other publishers under licence. The contract also allowed Moorhead to terminate the contract if Brennan failed to rectify any failure to comply with the terms of the agreement within a period of 90 days. Brennan wrote an explanatory introduction to the book which Moorhead agreed could be included in the Australian edition of the book. An overseas publisher, The Women's Press, offered to publish the book in England under licence, provided Brennan's explanatory introduction was dropped from their edition. This was because The Women's Press had a strict policy of only publishing writing by women. When Brennan refused to allow the book to be published without his introduction, The Women's Press withdrew their offer and Moorhead lost the opportunity to earn royalties. Moorhead sued Brennan for breach of a term implied into their contract ad hoc.
Issue: Was a term implied into the contract ad hoc that Brennan would not obstruct opportunities for Moorhead to receive royalties from persons publishing the book under licence?
Decision: The suggested term, or one with equivalent effect, was implied into the contract in the circumstances of the case. By refusing to drop his introduction from the overseas edition, Brennan had breached the term. Moorhead was therefore justified in terminating her contract with Brennan.
Reason: The only way that the parties could have contemplated that Brennan might pursue commercial opportunities outside Australia was by licensing an overseas publisher. And having given Brennan the sole right to produce, publish and licence the book, Moorhead had no other way of exploiting her copyright in the book. In these circumstances, the court held that all the requirements for establishing a term implied ad hoc were satisfied: the term was reasonable and equitable; it was necessary to give business efficacy to the contract; it was sufficiently obvious to 'go without saying'; it was capable of clear expression; and it did not contradict any express terms.