Implied ‘duty to speak’


The Court of Appeal (“CA”) found that an insurer had an implied ‘duty to speak’ to tell its customer that certain material it had requested for the purpose of investigating claims from the customer was outstanding. In the circumstances, the customer was entitled to expect that, if the insurer regarded the material as still to be provided, then, acting honestly and responsibly, it should have said so and not to do so was misleading.


In relation to commercial contracts generally, there is authority supporting an implied ‘duty to speak’ in certain circumstances which, if not complied with, could prevent a party from enforcing a contract (a so-called ‘estoppel’). Importantly, where this duty exists and it is breached, in almost all cases it does not enable the injured party to claim for damages but it may incidentally allow that party to progress a right to sue the defaulting party that would otherwise fail.



Duty to speak in commercial contracts

When does a ‘duty to speak’ arise?

Points to note:

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