Hutton v Warren [1836] EWHC Exch J61 (April 1836)

A tenant farmer's lease expired, but he claimed an allowance for seed and labour based on local custom. The lease was silent on this. The court held that established custom can be implied into a written contract unless expressly excluded.

Facts

The plaintiff was a tenant farmer on land in Lincolnshire, holding the tenancy under a lease from the former rector of the parish. In 1833, the defendant, the succeeding rector, gave the plaintiff notice to quit. Upon quitting, the plaintiff had undertaken tillage and sowing of the land during his final year, providing seeds and labour from which he would not benefit. The plaintiff claimed that, by the established ‘custom of the country’, he was entitled to a fair allowance for these seeds and labour. The written lease agreement between the plaintiff and the original landlord was silent on this specific matter of end-of-tenancy allowances.

Issues

The central legal issue was whether a term could be implied into a written lease agreement based on the ‘custom of the country’, particularly when the written contract made no express provision for the matter. This questioned the extent to which extrinsic evidence of custom could supplement a written agreement, touching upon the principles of the parol evidence rule.

Judgment

The Court of Exchequer, in a judgment delivered by Parke, B., held that the custom of the country could be implied into the lease. The court reasoned that parties to a contract are often presumed to have contracted with reference to known and established usages, which can be incorporated as implied terms unless they are expressly or implicitly excluded by the contract’s written terms. Parke, B. articulated the foundational principle:

It has long been settled, that, in commercial transactions, extrinsic evidence of custom and usage is admissible to annex incidents to written contracts, in matters with respect to which they are silent…. The same rule has been applied to contracts in other transactions of life, in which known usages have been established and prevailed; and this has been done upon the principle of presumption that, in such transactions, the parties did not mean to express in writing the whole of the contract by which they intended to be bound, but a contract with reference to those known usages.

The court found that the custom was not inconsistent with the express terms of the lease. It was a reasonable and established practice that ensured a departing tenant was fairly compensated for work that would benefit the incoming tenant or landlord. Therefore, the custom was deemed to be an implied part of the agreement.

The custom of the country is that which is applicable to all tenancies in whatever way created, whether by parol or by deed, unless expressly or impliedly excluded by the tenor of the agreement.

Implications

The case is a landmark authority in English contract law for the principle of implying terms by custom or usage. It firmly established that a written document is not always the complete record of the parties’ agreement. Where a particular trade, industry, or locality has a notorious, certain, and reasonable custom, it will be presumed to form part of any contract made within that context, provided it does not contradict the express terms. This ensures fairness and gives effect to the presumed intentions of the parties who contract against the background of such established practices. It remains a key case illustrating an exception to the strictness of the parol evidence rule.

Verdict: The rule to enter a nonsuit was discharged, meaning the verdict for the plaintiff (the tenant) stood.

Source: Hutton v Warren [1836] EWHC Exch J61 (April 1836)