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. (A)</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. (D)</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 (A)</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 (C)</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 (B)</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 (D)</p> Signup and view all the answers

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

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

What does incorporation of express terms by signature indicate?

<p>An indication of assent to the contract (A)</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 (D)</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 (C)</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 (B)</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 (A)</p> Signup and view all the answers

Which case exemplifies the significance of signature in contract assent?

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

Flashcards

Incorporation by Course of Dealing

Terms can be incorporated into a contract by showing a consistent pattern of previous similar contracts that included the terms.

McCutcheon v MacBrayne

A case illustrating that a consistent course of dealing is necessary for implied incorporation, highlighting that inconsistent practices prevent implied terms.

British Crane Hire Corporation v Ipswich Plant Hire

A case illustrating that similar trades make it easier to establish a course of dealing for incorporation.

Unusual or onerous terms

Unusually harsh or difficult contract terms, often requiring explicit agreement.

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Course of Dealing

A consistent pattern of prior dealings between parties that can lead to the incorporation of terms into subsequent contracts.

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Reasonable person test

A legal standard used to determine if someone should have known about contract terms, based on what a reasonable person would do in similar circumstances. It considers if the terms were accessible and visible.

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Objective Assessment

When determining if terms are incorporated by course of dealing, courts use an objective assessment to determine if it's reasonable to assume the parties knew and agreed to the terms.

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Knowledge of the terms

Incorporation by course of dealing requires proof that both parties were aware of the terms and that the terms were consistent in previous dealings.

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Consistent Dealings

A consistent pattern of previous similar transactions where the same terms are applied is crucial for incorporation by course of dealing.

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Express Terms

Specific conditions explicitly stated in a contract, often negotiated by both parties.

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Incorporation by Signature

A method of incorporating express terms into a contract by having both parties sign the agreement.

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Incorporation by Notice

Adding express terms to a contract by providing clear and timely information to the other party before the agreement is made.

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Reference at the Time of Contracting

Adding an express term into a contract by referring to a document or information the other party is aware of at the time of the agreement.

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What is assent?

A willing and conscious agreement to the terms of a contract, often demonstrated by signing or taking actions that indicate acceptance.

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How can a term be 'incorporated' into a contract?

There are three main ways to add a term to a contract: by signature, reference, or through a consistent course of dealing between parties.

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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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