Terms 3- incorporation

all terms must be incorporated into a contract in order to be effective. What are the three ways this can occur?
Signature, notice, or course of dealing (this would come up on a question about exclusion clauses)
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Incorporation by signature
L’Estrange v F Graucob Ltd [1934] 2 KB 394 Cafe owner signed contract without reading it, was still bound to terms.
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Incorporation by notice
Terms can also be incorporated by notice, even if there is no signature. contract must satisfy three requirements:
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What are the three requirements?
Notice must have been given at or before the time of contracting; Terms must have been contained, or referred to, in a document that was intended to have contractual effect; Reasonable steps must be taken to bring terms to attention of other party
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Time of notice
Notice must be given before or at time of contracting-Olley v Marlborough Court [1949] 1 KB 532 - notice on the back of hotel bedroom door excluded liability for lost or stolen articles.
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Hotel couldn't rely upon this to exclude their liability- why?
Notice was only introduced after the contract was formed with the guest
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Nature of document
Document containing the term must have contractual force. The document must be one in which a reasonable person would expect to find contractual terms.
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What is a good case for examining this?
Chapelton v Barry Urban District Council [1940] 1 KB 532 – deckchairs, injury, clause on back of receipt. V hires deckchair that collapses and he gains injuries. Council weren't liable bc of stub on back of ticket. However, court said this wasn't a
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excuse because this wasn't where you would expect to find contractual terms
Therefore, receipts in this case were not where you would expect to find contractual terms
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Degree of notice
Reasonable steps must be taken – by the party relying on the term – to bring the term to the attention of the other party. Question is, what are reasonable steps?
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this can be seen in Thompson v London, Midland and Scottish Railway [1930] KB 41 - excursion ticket, injury during journey, on face of ticket: “Excursion. For conditions see back.”
Court satisfied that was sufficient notice and was reasonable to draw attention to terms that apply
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What are some examples of insufficient notice?
Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 - notice at the entrance to a barrier-operated car park: “All cars parked at owner’s risk”; ticket dispensed: “Issued subject to conditions displayed on the premises.”
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What happened here?
Car fell on Thornton and caused severe injuries, threatening his career. If applying laws stated, one would conclude that exclusion cause was incorporated into the contract. However Denning said exclusion clause didn't apply because it needed more
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detail, allowing Thornton to claim
Denning said ' Some clauses would need to be printed in red ink on the face of the document with a red hand pointing to it before the notice could be held to be sufficient.' (making stuff up)
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What is another case that Denning's judgement comes into?
Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] delayed return of photo transparencies attracted an exorbitant charge as stipulated in Condition 2 on the delivery note. Around £11,000 in today’s money.
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What did the court say here?
The more onerous and unusual the term is, the greater the steps that must be taken in order to draw its existence to the other party’s attention. Therefore, they didn't have to pay- similar view to Denning
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Course of Dealing
Even without signature or reasonable notice, clause may be incorporated, if these clauses have been relied on before and there is consistency in the terms in which you deal
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What is the burden to prove this?
Burden to prove that course of past conduct sufficiently consistent to give rise to the implication that in similar instances a similar result will follow: McCutcheon v David MacBrayne Ltd [1964]– ferry sank on one occasion when the note with
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exclusion clause was not signed
Court said exclusion could apply bc contract was entered into on such regular terms that it should have been known by the defendants
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What does the course of dealing depend on?
facts of the case, but should be easier to prove in commercial dealings:Hollier v Rambler Motors (AMS) Ltd [1972]
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What happens in this case?
contracted three or four times a month over a period of three years; exclusion of liability for latent defects in pheasant food.
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However, what happens in Hollier v Rambler Motors (AMS) Ltd [1972]
wasn't regular enough for it to be relied upon
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Other cards in this set

Card 2


Incorporation by signature


L’Estrange v F Graucob Ltd [1934] 2 KB 394 Cafe owner signed contract without reading it, was still bound to terms.

Card 3


Incorporation by notice


Preview of the front of card 3

Card 4


What are the three requirements?


Preview of the front of card 4

Card 5


Time of notice


Preview of the front of card 5
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