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Update on the Incorporation of Terms and Conditions

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In the recent case of Rooney and Other –v- CSE Bournmouth Limited (2010) EWCA Civ 1285, the Court of Appeal held that the phrase “terms and conditions available upon request” on a work order could be interpreted as incorporating terms and conditions into the contract between the parties. 

The facts of the case revolved around a repair and maintenance agreement between Rooney and CSE.  Rooney owned an aircraft and CSE provided repair and maintenance services.  Before CSE started work on any repairs and/or maintenance services on the aircraft, it required Rooney to sign a work order.  The work order identified the name of the customer, the aircraft, the place where the work was to be carried out and the item of work to be done.  In large capitals at the bottom of the work order it stated that no work would commence until the work order had been signed and returned, and below this it stated “TERMS AND CONDITIONS AVAILABLE UPON REQUEST”. 

This case was initially heard in the High Court where the first instant judge held that the work order did not incorporate CSE’s terms and conditions because it did not use express language of incorporation, such as “this order is subject to the terms and conditions”. 

The Court of Appeal disagreed with the High Court because it felt that it was reasonable for a customer signing a work order to understand that the contractor was drawing attention to its standard terms and conditions for carrying out work, and that a copy of these terms and conditions would be available upon request.  The Court of Appeal considered that a business man in the position of the parties would construe such a phrase in this way.  The work order was intended to be a contractually binding document rather than a form of pre-contractual negotiations, therefore, it would be commercially unusual for a contract for the performance of services to not either contain, or be subject to, any detailed commercial terms and conditions.  In light of this, it was held that the words “terms and conditions available on request” had to bear some meaning in the context of the work order. 

While the ruling in this case is not ground breaking, it does emphasise the importance of using clear language to incorporate terms of business in a contract.  If CSE had been clear that its terms and conditions applied to the work order, it might have avoided this aspect of the litigation.  In addition, the case indicates that courts will consider the background circumstances and contractual framework when deciding whether terms and conditions have been incorporated. 

If you have queries, or require further information, about any aspect of this article, please feel free to call Matthew Hattersley on 0113 336 3351 or Victoria Lethaby on 0113 336 3324.

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