defendant relied on a not.
clause in the contract 4. The plaintiff contended that she was induced by misrepresentation which said that “The without
... [Show More] knowing its terms because she was told it was an order agreement contains all form, which she assumed would only contain terms regarding the
terms and conditions…any order itself, without exception clauses. Scrutton LJ held that express or whether the plaintiff was or was not told that the document was implied…warranty…are an order form, it was in fact an order form, which is a contractual hereby excluded”. document and a reasonable person in her position would have
L’Estrange argued that she understood that it would contain terms other than innocuous was not given reasonable order terms
notice of the particular 5. In a contract for sale of goods, the general rule is cerebis paribus, term and she did not have and if the buyer is suspicious about quality, it is up to them to knowledge of the term, check that the goods are of sufficient quality, or to get an express and further, that it was an promise of quality by the vendor. The law usually will not imply a order form, which was a term that the goods are of a certain quality. The Sale of Goods Act misrepresentation of the states this rule, but says that where the vendor deals in that type contractual nature of the of good, there should be some implied obligations that the goods document with regard to supplied by the vendor be reasonably fit for their purpose. In this exclusionary terms. case, this was excluded because L’Estrange signed the document
waiving this right of implied warranty.
6. Graucob has the onus of proving that L’Estrange was bound to their conditions rather than the traditional implied warranty as per the Sale of Goods Act. “The person, who alleges, must prove”
rather than the other having to prove the negative.
Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52
Facts Held
Richard Thomson was a subsidiary 1. The question was whether the exclusion clause on the
of EB, the Australian distributor of a back of the signed document was part of the contract;
flu vaccine. Alphapharm was a sub- since the contract was signed by RT as a third party,
distributor. RT agreed with rather than Alphapharm itself. Essentially, could RT act as
Alphapharm to look after the an agent of Alphapharm?
vaccine with regard to storing and 2. RT signed the “Application for Credit” document which
transport. The carrier of the vaccine invited them to read the terms and conditions before
was Finemores (the appellant) as signing. They were not rushed, or tricked into signing or
decided by RT and accepted by deceived in any way; they chose not to read it. Finemores
Alphapharm, who had no direct had no way of knowing that RT did not read the
dealing with Finemores. EB was document. Therefore, to sign a document, known and
liable for the costs of delivery into intended to affect legal relations, conveys a
storage and Alphapharm was liable representation that the signee either has read and
for the cost of delivery to approved the contents or is willing to take the chance of
customers. Finemores provided a being bound. This is even stronger when the signature is
quote which requested the written below something requesting conditions to be
completion of a credit application read. Essentially in this commercial context, the
and to assign a schedule accepting reasonable party would have known that there were rates and conditions. The form, terms of contract in with regard to exemption clauses or directly above the signature box said other relevant clauses
“please read ‘conditions of contract’ 3. “A man cannot escape the consequences of signing a prior to signing”. RT did not read document by saying, and proving, that he did not and signed. Cl 5 held that RT would understand it…it was for him to protect himself by be an agent for Alphapharm who abstaining from signing the document until he
were defined as parties under Cl 3 understood it and was satisfied by it” – Wilton v
(b). Cl 6 provided that Finemores Farnworth (1948) 76 CLR 646.
would not be liable for loss or 4. To sign a document known and intended to affect legal damage of the goods. The vaccine relations is an act which ordinarily conveys a
was damaged during transportation representation to a reasonable reader of the document. and Alphapharm sued. 5. Professor Atiyah has said that “a signature is recognised
even by the general public as being a formal device, and its value would be greatly reduced if it could not be treated as a conclusive ground of contractual liability at least in all ordinary circumstances
6. The conditions on the reverse constituted contractual
terms, therefore RT was bound thus was Alphapharm
Exceptions to the Signature Rule
Both of these exceptions were held in the following case:
Curtis v Chemical Cleaning & Dyeing Co [1951] 1 KB 805
Facts Held
Curtis took a white wedding dress to the 1. The bailee (Chemical Cleaning) must prove the Chemical Cleaning company. Curtis was exemption clause since they allege that the terms handed a paper headed “Receipt” which are within the contract.
she was asked to sign. Before doing so 2. Where a document would not by its ordinary
the customer asked why her signature operation carry contractual force – such as, in this was required and was told that it was case a receipt, the terms may not be incorporated in because the cleaners would not accept the absence of express stipulation by the
liability for risk of damage to beads and representor. If the receipt were considered a
sequins on the dress. Curtis signed the contractual document, a reasonable person in her
Incorporating terms by notice (ticket cases – conduct without signature) One party may allege that the contract contains terms which have been displayed/delivered before or at the time of transaction. Whether the other party will be bound depends on timing and knowledge/notice of the terms.
The party must have actual knowledge or reasonable notice of the particular term. However if the particular term is not unusual, then if a reasonable person would have some knowledge of the terms, and has had a chance to read it, then it will be binding.
Timing
For the delivered terms to form part of the contract they must be made available to the party to be bound at a time before the contract is made.
Oceanic Sun Line Special Shipping Company v Fay (1988) 165 CLR 197
Facts Held
Fay made a booking in 1. General Rule – If a passenger signs and binds themselves to the terms
NSW for a cruise in of a contract of carriage containing a clause exempting the carrier from
Greece. The travel liability it is immaterial that the passenger did not discover the contents
agent supplied Fay of the contract (L’Estrange). But in a ticket case, where an exemption
with an “exchange clause is contained in a ticket or other document intended by the
order” which was carrier to contain the terms, but the other party is not aware that an
then to be exchanged exemption clause is intended to be a term, the carrier cannot rely on
for a “Sun Line Ticket” that clause unless, at the time of contract, the carrier had reasonably
upon boarding in sought to bring the clause to the passenger’s notice
Athens. The ticket had a. It was held that the shipping line has not given reasonable
a condition that the notice of the condition of jurisdiction until after the contract
Greek courts would has already been made – the first real opportunity to give have full jurisdiction notice of this term is long after the contract has been made in in any action against Sydney
the owner; however 2. The first step in determining whether the contract of carriage
the exchange order contained the clause in question is to determine whether the contract had no such was entered into in Sydney when it was paid for, or in Greece when the condition. The ticket was issued.
plaintiff received a. Oceanic argued that it was illusory because they reserved the serious injuries while “right to cancel any cruise” (MacRobertson). However this taking part in an exemption did not preclude the existence of any contractual
activity on the ship obligation, it actually gave promises
and sued in b. If it were intended that no contract should come into existence negligence in the before the issue of the ticket when “boarding”, no
Supreme Court of consideration would have moved from Oceanic to support their NSW. Sun Line applied right to refuse to refund the passage money, as was the case. for a stay of the action The contract was made on payment and upon receipt of the based on that clause exchange order so that Oceanic was bound to issue the ticket limiting jurisdiction. with the terms as agreed upon.
3. The second step is to determine whether the contract made after was the contract, and whether it contained the exclusion clause
a. The conventional analysis of the issue of the ticket as an offer as per MacRobertson could not be applied because it could not be seen as the parties’ intention to have the ticket be an offer of carriage, which would only be declined after travelling to Greece to see the conditions on the ticket.
b. It was found that the payment of the fare could be regarded as the price of an option to acquire a ticket representing a certificate of entitlement to be carried on the terms already agreed.
4. Denis Analysis
a. The issue is whether the term got into the contract of carriage. If the Greek company wants to hold Fay to that term, then they hold the onus of proof, even if they are the defendant! If the defence you put up is that the plaintiff was bound to the contract, then you must prove there was a contract with those terms.
b. In the brochure advertising the cruise, there is a statement saying “terms of the cruise are available for inspection in the offices of our Sydney agent”. This tells where the terms are, but not what the terms are. The HCA said that this is still not reasonable notice of the terms, it does not bring the nature of the term to a reasonable person in the position of Fay, nor Fay himself. The carrier must bring the term to the attention of the
person, not tell them to go look themselves.
Knowledge or Notice
If the timing requirement is satisfied, the party will be bound to the delivered terms if:
1. They have knowledge (Parker v South Eastern Railway Co)
OR, in the absence of knowledge, if
2. The offeror was reasonable in giving the offeree notice of the condition (Thornton v Shoe Lane Parking; Baltic Shipping).
Notice must come in a form that is likely to come to the attention of the party being bound (Causer v Brown; Thornton). Whether there is reasonable notice depends on:
1. The type of contract – how serious would consequences be if particular terms were enforced
2. The nature of terms – unusual terms require more detailed notice
3. The circumstances of the case
a. This has regard to the above two factors as well as:
i. Time and access
ii. Legibility/ease of understanding
iii. Characteristics of the people to whom notice is being given
Note that this does not apply with signed contracts, as discussed in Toll v Alphapharm where the HCA rejected the need for special notice of unusual terms in a signed contract.
Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163
Facts Held
Thornton parked his car 1. In a case with an automatic ticket machine, the terms of the offer are
in a car park owned by contained in the notice placed on or near the machine stating what is
Shoe Lane, which he offered for the money. The customer is bound by those terms as long
was unfamiliar with. as they are sufficiently brought to his notice before hand, but not
There was a notice on otherwise. He is not bound by the terms printed on the ticket if they
the outside which gave differ from the notice.
parking charges and a 2. “It is no use telling the customer that the ticket issued is subject to
notice saying “all cars some ‘conditions’ or other, without more: for he may reasonable
parked at owner’s risk”. regard ‘conditions’ in general…not as taking away his rights, unless
Upon driving in he the exempting condition is drawn specifically to his attention’
received a ticket and 3. The conditions were not displayed in a manner giving Thornton
then parked his car. The reasonable notice with which he could accept or reject the offer by
ticket made reference his own choice. There was no evidence that Thornton knew of the
to additional terms exempting condition. Therefore the term did not become part of the
which were to be found contract.
on a pillar near the 4. Where a term is so “wide and destructive of rights” they must be
ticket office. Thornton explicitly noted.
was severely injured 5. Denis Analysis
upon coming to collect a. When you go to a parking station, you have a contractual
his car and sued. Shoe licence to leave your property on their land. They are in effect
Lane attempted to rely offering permission to leave your car there in return for your on an exclusion clause promise to pay their advertised charges for as long as your car present on the is left, and a promise to give them exemption from certain
additional terms. liabilities. If they bring it to your attention before the contract is concluded, and you still park there, your conduct can be deemed as consent to the terms.
b. Lord Denning – says that the contract is formed when the ticket is issued by the machine. IF that is the case, the only terms that can get in the contract are those which have been notified to the customer previous to that – i.e. on the notice near the machine.
c. Megaw LJ – the contract is formed after the ticket is given, and the driver takes it and drives in. In this case, there is still not reasonable notice, since once you take the ticket you cannot just stop and read the terms while other cars wait behind you
d. Sir Gordon Willmer – the ticket is an offer to do business on the terms according to the ticket. The contract is only formed once the party decides they will take the benefit of the service, by parking the car and leaving the car-park. The attempt to refer him to provisions set out elsewhere does not come too late, since he can go to the pillar and read the terms. However a reasonable person in his position would not look for pillars, and even if they did, they would wade through difficult language and still wouldn’t have had reasonable
notice of the unusual term.
Unusual Terms
Baltic Shipping Co v Dillon (The Mikhail Lermontov) (1991) 22 NSWLR 1
Facts Held
Dillon made a booking for a cruise with 1. The conditions in the booking form were given with Baltic Shipping through a travel agent reasonable notice; however the additional conditions and then received a booking on the ticket were not and therefore did not form part acknowledgment. Later Dillon received of the contract since the availability of these terms
a booking form asserting a contract of was not adequate.
carriage would be made “only at the 2. Unusual terms require explicit attention to be drawn time of issuing of tickets” which to them. “At the very least, Baltic Shipping could have contained conditions. One month later drawn to attention, on its booking form, the fact of Dillon paid the balance of the fair and the limitation of liability for personal injury and
then two weeks later received a ticket, damage to luggage…this was not done”
which contained terms and conditions 3. The mere presentation of the passenger ticket with its limiting the liability of Baltic for injury terms and conditions would not fix Dillon with
and damage to personal effects. On the acceptance of those terms simply because she went
tenth day, the ship sank and Dillon on the cruise. “She was entitled, in law, to take the
suffered physical and psychological view that she would be issued with a ticket which injury and the loss of her belongings. would contain no unusual provisions, specifically no Baltic admitted fault, but argued that provisions of which she was not on notice limiting
the provisions limited liability. liability to her”.
“The conventional analysis is to regard the ticket as an offer, the contract being made upon acceptance of that offer [acceptance of the ticket without objection] by the passenger...” (Stephen J in MacRobertson Miller)
Case Facts Approach Significance
Thornton v Shoe Lane Parking The plaintiff wished to park his car in the
defendant’s car park. He drove his car into the driveway; a green light indicated that he should proceed. He paid money into a machine and then received a ticket. The offer is made when the proprietor of the machine holds it out as ready to receive the money. The acceptance takes place when the customer makes the
payment. The ticket could not be considered an offer – the customer had already paid and could not receive his moneys back. The customer is bound only by those terms displayed prior to the payment of money. He is not bound to terms on the ticket
which differ from these.
Oceanic Sun Line Special Shipping Company v Fay The plaintiff made a booking for a cruise. The travel agency had supplied him with an "exchange order" which was exchanged for a ticket upon boarding the ship. He received this upon reaching Athens. It could not have been the party’s intention that the ticket, received upon boarding, was the offer. It would not allow sufficient opportunity for the passenger to consider the terms
and accept/decline. As above, the ticket could not reasonably be considered an offer – the customer would not have sufficient time to consider the terms upon boarding. The customer is bound only to those terms presented to them in the exchange order. He is not bound to terms on the ticket
which differ from these.
Baltic Shipping Co v Dillon The plaintiff made a booking for a cruise. The travel agency provided an exchange form which stated that a contract would be formed upon
the issuing of tickets. The provisions in the exchange form were accepted. The contract was formed upon the issuing of the ticket. Acceptance is not implied by the customer commencing the cruise, of terms other than those typical to such a contract.
Normally, if A wants to hold B to the terms of the contract, A must take steps to bring B the attention of the term by producing a document, displaying a notice on the occasion in question before the contract is concluded, or handing the document containing the terms before the
transaction is made even if B didn’t sign, or make some clear statement of the term to B. Sometimes
A may not have taken specific steps to bring the term to the attention of B before the transaction.
Sometimes they don’t rely on the specific term but on the past practice of the two parties. If A can
show that he and B had a large number of previous dealings, always on the same nature, then sometimes that will be enough to show the regularity means that A always wanted to do business on particular terms. If the previous dealings can lead a reasonable person to believe a particular form of dealing, they would believe B knows the terms or methods that A wants from previous dealings.
A has to show that B or a reasonable person in B’s position would by now have known that a term of a particular kind is one that A invariably wants to be the basis of goods and services. It is not enough that the dealings give the “gist” of the dealings, it must give wariness of the nature of the particular term sought to be enforced. This is determined by the type of documents produced; how they have been given, the time of opportunity to read them etc. Naturally you would expect the person who wants to hold another to the term to draw the attention of the person to the particular term on the particular occasion.
Incorporation of express terms by a course of dealings
Where parties have had a history of dealings, contractual terms introduced and kept by in earlier contracts may be incorporated into a subsequent contract, even if the ordinary requirements of incorporation of such a term has not be met.
This issue typically arises where:
1. There is no actual knowledge of the term
2. Incorporation by notice cannot be used because of the timing [Show Less]