Incorporation of contract terms
ROONEY v CSE BOURNEMOUTH (CA) [2010]
An aircraft maintenance company (C) appealed against a decision that its standard conditions of trading were not incorporated into a work order form.
facts:
C accepted work orders subject to work order forms which said “terms and conditions available on request”. The question was whether this was sufficient to incorporate C’s standard terms and conditions into its maintenance contracts.
decision:
- The High Court originally held that C’s terms and conditions were not incorporated because they conveyed no more than that there were terms and conditions available, and they did not purport to incorporate any particular terms and conditions into a contract. This was overturned on appeal.
- While the first judge’s interpretation of the words used might have been correct grammatically, in a business context it would be odd if a contractually binding order such as the work order form contained no commercial terms but left them only for inclusion at a customer's request. The Court of Appeal (CA) said that the test was whether reasonable people would have understood the words used as referring to contractual terms upon which C had agreed to do the work on the aircraft. It was at least arguable that a reasonable person would have understood the words in this way.
point to note:
- This has to be a sensible and pragmatic outcome. However, what the case does highlight is that shorthand can potentially be dangerous and that precision is important if you are to avoid getting involved in long and expensive court cases. Great care needs to be taken to say exactly what you mean.