5.3 express terms (reasonable notice) (slides) S02Y24-1.pptx

Principles of Business Law TOPIC 5: TERMS OF A CONTRACT EXPRESS TERMS: REASONABLE NOTICE Semester 2 2024 Expressly agreed terms: Incorporation of terms by notice  Terms may be contained in:  an unsigned document  eg, notice/sign  eg, tic...

Principles of Business Law TOPIC 5: TERMS OF A CONTRACT EXPRESS TERMS: REASONABLE NOTICE Semester 2 2024 Expressly agreed terms: Incorporation of terms by notice  Terms may be contained in:  an unsigned document  eg, notice/sign  eg, ticket  Such terms will form part of the contract if the following two requirements are met:  the knowledge/notice requirement; and  the timing requirement Incorporation of terms by notice: The knowledge/notice requirement To satisfy the knowledge/notice requirement, it must be shown:  the party said to be bound by the term had actual knowledge of the term; OR  the party seeking to enforce the term gave reasonable notice of the term to the person said to be bound. Incorporation of terms by notice: Timing requirement The knowledge/notice requirement must have been met before the contract was formed. Incorporation by notice: Nature of unsigned document Sydney Corporation v West FPBCL p 423-4 Facts  W was handed a ticket by an attendant as he entered the carpark (not from a machine as stated in FPBCL).  The ticket contained the following statement: The council does not accept responsibility for the loss or damage to any vehicle … however such loss, damage or injury may arise or be caused  W’s car was stolen as a result of SC’s employee’s negligence.  W sued to recover damages. Issue  Did the statement on the ticket become a term of the contract between W and SC, and thus protect SC from liability? Incorporation by notice: Nature of unsigned document Sydney Corporation v West Decision  The statement on the ticket was a term of the contract. Reason  Timing requirement  Offer: issue of the ticket.  Acceptance: parking the car (had W wanted to reject the offer he should have immediately left the carpark).  Knowledge/notice requirement  W had been given reasonable notice of the terms before the contract was formed (as he was handed the ticket which contained the terms).  It is common knowledge that terms are contained on such tickets.  Note influence of the objective approach. Incorporation by notice: Nature of unsigned document Causer v Browne FPBCL p 331 Facts  C took a dress to B for dry cleaning  C was handed a ‘docket’ that contained an exclusion clause which purported to exclude liability for loss or damage  C did not read the docket and B did not draw C’s attention to the fact that it contained contractual terms  The dress was stained, and C sought compensation  B defended the claim by relying on the exclusion clause stated on the docket Issue  Did the exclusion clause contained in the docket exclude B’s liability? Incorporation by notice: Nature of unsigned document Causer v Browne Decision  The exclusion clause was not a term of the contract Reason  Timing requirement  We do not need to consider this. Why?  Knowledge/notice requirement  C had not read the term, so had no knowledge of it  A reasonable person would not think that a docket would contain contractual terms Incorporation by notice: Olley v Marlborough Court Ltd FPBCL p 397 Facts  When Mr and Mrs O arrived at the Marlborough Court hotel, they paid for their room and signed the room-hire contract.  On the wall of their room was a notice which stated that the proprietors were not responsible for lost or stolen items.  A housekeeper left Mr and Mrs O’s room unlocked and a thief entered the room and stole Mrs O’s fur coats. Incorporation by notice: Olley v Marlborough Court Ltd (ctd) Issue  Was the statements in the notice on the hotel wall that purported to exclude liability a term of the contract? Decision  The statement in the notice was not a term of the contract. Incorporation by notice: Olley v Marlborough Court Ltd (ctd) Reasoning  Knowledge/notice requirement (requirement met)  Once in their room, Mr and Mrs O read the sign, and thus had actual knowledge of the term.  The display of the sign also amounted to reasonable notice.  Timing requirement (requirement not met)  Mr and Mrs O needed to have actual knowledge of the term, or be given reasonable notice of the term, prior to the formation of the contract.  The contract was formed when Mr and Mrs O checked in.  A terms is not incorporated unless both the knowledge/notice and timing requirements are met.  Conclusion: the statement was not a term of the contract because Mr and Mrs O did not have actual knowledge of the term, nor had reasonable notice been provided, prior to the formation of the contract.