express terms - incorporation of terms
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Questions and Answers

In McCutcheon v MacBrayne, what did Lord Reid suggest about the implication of conditions in contracts?

  • Conditions could be implied if there was a series of similar contracts. (correct)
  • Conditions are irrelevant if not mentioned.
  • Parties cannot imply conditions in oral contracts.
  • Conditions must always be explicitly referenced.

    • What was a key point made by Lord Pearce regarding the method of contract offer in McCutcheon v MacBrayne?

  • Good faith is not relevant in oral contract offers.
  • Conditions must always be disclosed to be valid.
  • Oral contracts can be offered without reference to conditions. (correct)
  • The contract must always be in writing.

    • Which case implies that a consistent course of dealing is often easier to establish among parties in the same trade?

  • Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd
  • Montgomery Litho Ltd v Maxwell
  • British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd (correct)
  • WS Karoulias SA v Drambuie Liqueur Co Ltd

    • What does the 'red hand rule' from the case Thornton v Shoe Lane Parking signify?

    <p>Onerous terms must be brought to the attention of the other party.</p> Signup and view all the answers

    In the context of incorporation by course of dealing, what might a course of dealing also result in, as per WS Karoulias SA v Drambuie Liqueur Co Ltd?

    <p>Preclusion of contractual effect.</p> Signup and view all the answers

    What must a person bear if they have no knowledge of a bill of lading, according to the Parker v South Eastern Railway Co case?

    <p>The consequences of their ignorance</p> Signup and view all the answers

    In Thompson v London, Midland and Scottish Railway Co, what is explicitly stated about the excursion tickets?

    <p>They are subject to conditions found in the company’s notices</p> Signup and view all the answers

    What is required for terms to be incorporated by a course of dealing?

    <p>The parties must objectively know of and assent to the conditions</p> Signup and view all the answers

    What should a reasonable person realize regarding contract terms on a document?

    <p>They should be expected to be found on the document</p> Signup and view all the answers

    What does the term 'course of dealing' refer to?

    <p>A series of prior transactions between parties</p> Signup and view all the answers

    What does incorporation of express terms by signature indicate?

    <p>An indication of assent to the contract</p> Signup and view all the answers

    Which of the following is NOT a method of incorporating express terms that have not been negotiated?

    <p>Mutual agreement in silence</p> Signup and view all the answers

    How can express terms be incorporated by reference at the time of contracting?

    <p>Through written notifications within a contract</p> Signup and view all the answers

    What does 'course of dealing' refer to in the context of contract terms?

    <p>Regular patterns of conduct between the parties</p> Signup and view all the answers

    In the context of express terms, which of the following best explains what is meant by Notice?

    <p>Informing the other party of terms present at the time of agreement</p> Signup and view all the answers

    Which case exemplifies the significance of signature in contract assent?

    <p>Sundolitt v Addison</p> Signup and view all the answers

    When incorporating terms through course of dealing, which factor can significantly support the terms' enforceability?

    <p>Frequency of transactions</p> Signup and view all the answers

    What happens if a party to a contract does not read an email regarding new terms before agreeing?

    <p>They are still bound by the new terms that were communicated</p> Signup and view all the answers

    Study Notes

    Express Terms - Incorporation of Terms

    • The focus is on circumstances where a non-negotiated express term becomes part of a contract.
    • Express terms not previously negotiated can be incorporated in three ways:
      • Signature
      • Reference at the time of contracting (Notice)
      • Course of dealing between the parties.

    Example 1

    • A bus company purchases 20 new electric buses.
    • Passengers use the new buses.
    • Students are asked to consider how express terms might be incorporated into contracts between the bus company and the supplier, and between the passenger and the bus company.

    Example 2

    • A student upgrades their mobile phone plan.
    • They sign a contract with a local mobile phone shop.
    • Students are asked to consider how the express terms might be included in the contract between the student and the mobile phone shop.

    Example 3

    • A café owner receives weekly deliveries of fresh fruit and vegetables from a local farm.
    • A voice note is sent for pumpkins.
    • The farmer replies with an email detailing a 25% increase in pumpkin price due to poor harvest and increased demand.
    • Students are asked to consider how the express terms might be included in the contract between the café owner and the farm.

    Incorporating Express Terms not Previously Negotiated - Quick Reminder

    • Express terms (not negotiated) can be incorporated in three ways:
      • Signature
      • Reference at time of contracting (Notice)
      • Course of dealing

    Incorporation by Signature

    • Effect: Indication of assent.
    • Sundolitt v Addison [2017] CSIH 15: Assent to what?
    • Montgomery Litho Ltd v Maxwell 1999 SLT 1431: Fair notice of unusual or special conditions.
    • Brandon Hire Plc v Russell [2010] CSIH 76: Electronic equivalents of a signature (express assent).
    • Online contracts: Electronic equivalents of a signature (express assent).

    Incorporation by Reference to Terms and Conditions (1)

    • Effect: Terms are incorporated if the document is contractual.
    • Examples of contractual documents: Tickets, invoices, receipts, acceptance notes, delivery notes.
    • Timing is crucial for incorporation.
    • If the document is not contractual, it doesn't incorporate terms.

    Incorporation by Reference to Terms and Conditions (2)

    • Taylor v Glasgow Corporation 1952 SC 440: Contracts with a "For conditions see other side" clause.

    • The Corporation of Glasgow is not responsible for any loss, injury, or damage sustained by persons using the establishment or its equipment.

    • Image source and link provided.

    Incorporation by Reference to Terms and Conditions (3)

    • Thornton v Shoe Lane Parking [1971] 2 QB 163: Reasonable sufficiency of notice test.
      • Offer: Machine ready to take money.
      • Acceptance: Placing money in the machine.
      • Ticket: Subject to conditions displayed on premises.
    • Indigo Park Services Ltd v Watson [2017] 9 WLUK 46: Relevant case discussed.

    Incorporation by Reference to Terms and Conditions (4)

    • Sign v Ticket:
    • Chapelton v Barry Urban District Council [1940] 1 KB 532: Example of a sign versus a ticket scenario.
    • Sign: "Barry Urban District Council. Cold Knap. Hire of chairs 2d. per session of 3 hours" -Ticket (front): “Barry Urban District Council. Cold Knap. Chair Ticket 2d. Not transferable" -Ticket (rear): “Available for three hours. Time expires where indicated by cut-off and should be retained and shown on request. The council will not be liable for any accident or damage arising from the hire of the chair"
    • Relevant link provided.

    Incorporation by Reference to Terms and Conditions (5)

    • Olley v Marlborough Court Ltd [1949] 1 KB 532: The proprietors are not responsible for lost or stolen articles unless handed to the manageress for safe custody. The notice was inside the bedroom, after the contract was formed.
    • Items were stolen from the room.
    • Students should discuss with a neighbour: What questions should be asked?

    Incorporation by Reference to Terms and Conditions (6)

    • Olley v Marlborough Court Ltd [1949] 1 KB 532: Best way to prove incorporation is through a signed document or a notice of the terms at the time of the contract. A prominent, clear public notice in the contract will count as well. These stipulations must be clear.

    Reference to Terms and Conditions - Ticket Cases (1)

    • Parker v South Eastern Railway Co (1877) 2 CPD 416: Cloakroom ticket case.
    • Front of Ticket: See back
    • Rear of Ticket: The company will not be responsible for any package exceeding £10.

    Reference to Terms and Conditions - Ticket Cases (2)

    • Parker v South Eastern Railway Co (1877) 2 CPD 416: Discusses the responsibility of a man of business versus someone not familiar with the rules. A layperson should be informed of the terms.

    Reference to Terms and Conditions - Ticket Cases (3)

    • Thompson v London, Midland and Scottish Railway Co [1930] 1 KB 41: Excursion ticket case.
    • Ticket front: "Excursion, see back" for conditions
    • Ticket rear: Includes regulations of the railway company.
    • Excursion Bill: Conditions shown in company's timetables.
    • The condition that neither the holder nor any other person should have a right of action against the company due to injury or damage caused.

    Incorporation by Course of Dealing (1)

    • What is a course of dealing? A series of transactions prior to the one in question (e.g. prior contracts).
    • What else is required? Objectively, the parties must know the conditions and have agreed to them.

    Incorporation by Course of Dealing (2)

    • McCutcheon v MacBrayne 1964 SC (HL) 23: Four previous dealings with a signed note but not in this particular case. A series of similar contracts that include certain conditions, and then a new contract, might lead to those conditions being implied.

    Incorporation by Course of Dealing (3)

    • McCutcheon v MacBrayne 1964 SC (HL) 23: A consistent course of dealing is not apparent (consistent course of asking for signature vs. accepting goods based on word).

    Incorporation by Course of Dealing (4)

    • British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd 1975 QB 303: Where parties are in similar trades, a course of dealing will be established more easily.
    • WS Karoulias SA v Drambuie Liqueur Co Ltd [2005] CSOH 112: A course of dealing might preclude contractual effect (e.g. the preclusion of an implied contract due to the history of dealing).

    Incorporation by Course of Dealing (5)

    • Unusual or onerous terms.
    • Montgomery Litho Ltd v Maxwell 1999 SLT 1431, Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1988] 1 ALL ER 348, Thornton v Shoe Lane Parking [1971] 2 QB 163 (Red hand rule).

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