LW11011 PLS I - Week 7 Introduction to Contract Terms 2024 PDF

Express Terms – Incorporation of Terms Welcome to PLS I – Week 7 with Dr Lorna Gillies Express Terms – Incorporation of Terms Our focus: In what circumstances can an express term that has not been negotiated by the parties form part of a contract? Incorporation of Express Terms not...

Express Terms – Incorporation of Terms Welcome to PLS I – Week 7 with Dr Lorna Gillies Express Terms – Incorporation of Terms Our focus: In what circumstances can an express term that has not been negotiated by the parties form part of a contract? Incorporation of Express Terms not previously Negotiated Express terms that have not been negotiated can be incorporated in one of three ways, either by: Signature, or Reference at the time of contracting (Notice), or By course of dealing between the parties.  Example 1 A bus company wants to purchase 20 new electric buses to expand its business operations. The buses are delivered and put into operation. A passenger wants to go into town on one of the new electric buses. Discuss with a neighbour: How might an express term be incorporated in the following contracts: (i) the bus company and the supplier of the buses and (ii)the passenger and the bus company?  Example 2 A student wants to upgrade their mobile phone plan. They visit their local mobile phone shop and signed a new contract. Discuss with a neighbour: How might an express term be incorporated between the student and the mobile phone shop?  Example 3 For the last five years, a cafe owner has received a weekly delivery of fresh seasonal fruit and veg from their local farm. Two weeks ago, the cafe owner sent a voice note to the farmer for 20 pumpkins. The farmer replied with an email but the cafe owner didn’t read it until after the pumpkins were delivered. The farmer’s email explained that due to poor harvest and increased demand, the cost of pumpkins had gone up by 25% from the previous year. Discuss with a neighbour: How might an express term be incorporated between the cafe owner and the farm? Incorporating Express Terms not Previously Negotiated – Quick Reminder Express terms that have not been negotiated can be incorporated in one of three ways, either by: Signature, or Reference at the time of contracting (Notice), or By course of dealing between the parties.  Incorporation by Signature Effect: An indication of assent Sundolitt v Addison CSIH 15 But assent to what? Fair notice of unusual or special conditions Montgomery Litho Ltd v Maxwell 1999 SLT 1431 Brandon Hire Plc v Russell CSIH 76 Electronic equivalents of signature (express assent) Online contracts Incorporation by Reference to Terms and Conditions (1) Effect: Terms incorporated if document referring is contractual e.g., a ticket for a bus If document referring is not contractual, does not incorporate terms Invoices, receipts, acceptance notes, delivery notes Timing is important! Incorporation by Reference to Terms and Conditions (2) Ticket v Voucher: Taylor v Glasgow Corporation 1952 SC 440 “For conditions see other side” “The Corporation of Glasgow are NOT responsible for any loss, injury or damage sustained by persons entering or using this establishment or its equipment” Image source: https://www.glasgowlife.org.uk/sport/venues/glasgow-club-north-woodside https://www.theglasgowstory.com/image/?inum=TGSA01980 Incorporation by Reference to Terms and Conditions (3) Notices - Reasonable sufficiency of notice test: Thornton v Shoe Lane Parking 2 QB 163 Offer : Machine ready to receive money Acceptance : Placing money in the slot in the machine Ticket : “This ticket is subject to the conditions of issue as displayed on the premises” Indigo Park Services Ltd v Watson 9 WLUK 46 Image source: https://www.gettyimages.co.uk/detail/news-photo/the-centre-well-of-the-mechanical-car-park-in-shoe-lane-news-phot Incorporation by Reference to Terms and Conditions (4) Sign v Ticket: Chapelton v Barry Urban District Council 1 KB 532 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” https://www.thebeachguide.co.uk/south-wa les/glamorgan/cold-knap-barry.htm Incorporation by Reference to Terms and Conditions (5) Olley v Marlborough Court Ltd 1 KB 532 Notice in bedroom: “The proprietors will not hold themselves responsible for articles lost or stolen, unless handed to the manageress for safe custody. Valuables should be deposited for safe custody in a sealed package and a receipt obtained” Items were stolen from the room Discuss with a neighbour: What do we need to ask? Incorporation by Reference to Terms and Conditions (6) Olley v Marlborough Court Ltd 1 KB 532 “The best way of proving it is by a written document signed by the party to be bound. Another way is by handing him before or at the time of the contract a written notice specifying its terms and making it clear to him that the contract is on those terms. A prominent public notice which is plain for him to see when he makes the contract or an express oral stipulation would, no doubt, have the same effect. But nothing short of one of these three ways will suffice.” per Lord Denning. Reference to Terms and Conditions – Ticket Cases (1) Parker v South Eastern Railway Co (1877) 2 CPD 416 Cloakroom ticket Rear of Ticket: Front of Ticket: The company will not be See back. responsible for any package exceeding the value of £10. In certain circumstances, a reasonable person ought to realise that they would find contract terms on a document Reference to Terms and Conditions – Ticket Cases (2) Parker v South Eastern Railway Co (1877) 2 CPD 416 “It is… quite possible to suppose that person who is neither a man of business nor a lawyer might on some particular occasion ship goods without the least knowledge of what a bill of lading was, but in my opinion such a person must bear the consequences of his own exceptional ignorance, it being plainly impossible that business could be carried on if every person who delivers a bill of lading had to stop and explain what a bill of lading was.” Reference to Terms and Conditions – Ticket Cases (3) Thompson v London, Midland and Scottish Railway Co 1 KB 41 Ticket front: “Excursion: For conditions see back” Ticket rear: “Issued subject to the conditions and regulations in the company’s timetables and notices and excursions and other bills” Excursion Bill: “Excursion tickets are issued subject to the notices and conditions shown in the company’s current timetables” Timetable: “Excursion tickets… are issued subject to the… condition that neither the holders or any other person shall have any right of action against the company… in respect of… injury (whether fatal or otherwise)” Discuss with a neighbour: Has there been reasonable notice of existence of term?  Incorporation by Course of Dealing (1) What is a course of dealing? A series of transactions prior to the one in question What else is required? That, judged objectively :- the parties know of the conditions; and have assented to them.  Incorporation by Course of Dealing (2) McCutcheon v MacBrayne 1964 SC (HL) 23 https://youtu.be/DwHzQkNIpdU?si=Xaqls9PKna7G2VJp Risk Note: 3-4,000 words of conditions Note was signed on four previous occasions but not on this one “If two parties have made a series of similar contracts each containing certain conditions, and then they made another without expressly referring to those conditions, it may be that those conditions ought to be implied” per Lord Reid  Incorporation by Course of Dealing (3) McCutcheon v MacBrayne 1964 SC (HL) 23 “According to Mr McSporran there had been no consistent course of dealing; sometimes he was asked to sign and sometimes not. And, moreover, he did not know what the conditions were. This time he was offered an oral contract without any reference to conditions, … he accepted the offer in good faith” per Lord Pearce Incorporation by Course of Dealing (4) British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd 1975 QB 303 Where parties are in the same trade, it will usually be easier to establish a course of dealing WS Karoulias SA v Drambuie Liqueur Co Ltd CSOH 112 A course of dealing might also preclude contractual effect  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 1 ALL ER 348 Thornton v Shoe Lane Parking 2 QB 163 – Red hand rule