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is a useful indicator relevant to the ultimate question of what a reasonable person would haveunderstood the contract to mean. This is construed objectively by a notional reasonable person withknowledge of the relevant background.At the end of11.19add the following:Thus, inKitching v Phillips(2011) 278 ALR 551 at 563, Murphy JA said:[A]n implied term will contradict an express term of the contract if it is inconsistent with the expressterms properly construed, including where there is an express term which appears to be intended tocover the field that would otherwise be occupied by the implied term and where it appears on theface of the agreement that the parties have adverted to the point and deliberately abstained fromdealing with it.In relation to this requirement, the existence of an entire agreement clause (see10-21-10.22)in the contact may give rise to an inconsistency and thus preclude the implication of a termon the facts of the contract. If the entire agreement clause explicitly refers to implied termsthen an inconsistency arises precluding the implication of terms:Hope v RCA Photophone ofAustralia Proprietary Limited(1937) 59 CLR 348 at 357-8, 363. However, where there is noexplicit reference to implied terms in the entire agreement clause, the majority of judicialopinion suggests that such a clause will not preclude the finding of the existence of animplied term in fact:Hart v MacDonald(1910) 10 CLR 417 at 421, 427, 430;Etna v Arif[1999] 2 VR 353 at 371; but see contraNT Power Generation Pty Ltd v Power and WaterAuthority(2001) 184 ALR 481 at 571.At the end of11.25add the following:Finally, it has been held that the implied term of mutual trust and confidence is fundamentallydifferent from any implied term to act in good faith (see11.44-11.46) because, as was pointedout by Rothman J inGillies v Downer EDI Ltd[2011] NSWSC 1055 at [204], the mutualtrust and confidence term could not apply in relation to a termination of the contract ofemployment whereas the good faith term could.At the end of11.26add the following:This implied term includes within its scope the so-called ‘prevention principle’:BAE SystemsAustralia Ltd v Cubic Defence New Zealand Ltd[2011] FCA 1434 at [55]-[60]. Theprevention principle was described by Lord Cockburn CJ inStirling v Maitland(1864) 122ER 1043 at 1047 as follows:[I]f a party enters into an arrangement which can only take effect by the continuance of a certainexisting state of circumstances, there is an implied engagement on his part that he shall do nothing of
his own motion to put an end to that state of circumstances, under which alone the arrangement canbe operative.However, the implied term of co-operation term does not override an express term in thecontract to the contrary:EDWF Holdings 1 Pty Ltd v EDWF Holdings 2 Pty Ltd

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