COMMENT OF THE DAY #50
Sellers + Buyers entered into an acquisition agreement. The purchase price required ‘a working capital adjustment’ to be ascertained by expert determination which “will be final + binding in the absence of manifest error”. There was an error. Sellers’ claimed compensation. They were was unsuccessful because the error was not a manifest error Sellers would have won if they had proved the expert’s error was a “howler” or involved “oversights and blunders so obvious” that they met the meaning of “manifest error”.
I am indebted to Holmans – HFW – for highlighting the point.
A similar point comes up when a party argues in favour of the inclusion of an implied term. The terms sought to be implied has to be “so obvious”. It is a high test – not just any test. We may start with the balance of probabilities but with these kinds of matters – and also with allegations of fraud – the burden on the party proving their case of manifest error or implied term or fraud is higher – much higher.