When attempting to use standard terms of business it is essential that they have been effectively incorporated into the contract. The extent to which these terms need to be brought to the attention of the other party is not certain, the issue being that should it be held that it was not sufficiently brought to the other party's attention they will not be bound. The Court of Appeal has held in June of this year that the incorporation of the phrase 'terms and conditions available upon request' could be sufficient action to incorporate the terms into the contract. Rooney v CSE1 – Court of Appeal Rooney (R) made a claim in negligence over servicing work completed by CSE on an aircraft owned by him. CSE argued that the level of its liability was limited by the terms and conditions of the contract; in this case the phrase 'terms and conditions available upon request' had been printed just below the signature box on the work order form. R countered that these terms and conditions alluded to by the phrase didn't apply, as they had not been properly incorporated into the contract. Therefore, the issue was whether the phrase 'terms and conditions available upon request' printed was sufficient to incorporate the terms and make them binding under the contract. At first instance R successfully persuaded the Court that CSE's terms and conditions were inapplicable. CSE appealed to the Court of Appeal against the first instance decision that it's standard conditions of trading were not incorporated into a work order form. It was held by the Court of Appeal that the principle regarding the construction of contractual documents should be followed in order to decide whether the terms had been incorporated or not, this being whether a reasonable person would understand the words used as referring to contractual terms upon which the party had agreed to do the work. It was decided that it was likely that a reasonable person would understand the words used to be referring to contractual terms, and therefore they were incorporated into the contract and were binding. Conclusion It was clearly asserted by the court that the question to determine whether standard terms actually apply is: whether reasonable people in the position of the parties would understand the words used as referring to contractual terms on which the parties agreed to do the work. The case showed that the argument that the terms apply could succeed, but relied heavily on the specific facts of the case. It therefore seems apparent that the outcome of each case will rely on the specific facts, this making it essential that parties should take time to consider whether the terms they want to work under are effectively incorporated before agreeing the contract. • For additional information or comment please contact: Justin Emerson of Gepp & Sons. The above is not legal advice; it is intended to provide information of general interest about current legal issues.
Terms & Conditions available on request