Commercial Disputes - What's New Jan 22?
Wishing you all a Happy New Year and hope you had a relaxing festive break. This month’s update includes lessons from recent litigation concerning ‘cunningly concealed’ standard terms and a TUI package holiday that didn’t end very well.
Blu-Sky Solutions Limited (C) entered into a contract with Be Caring Limited (D) to provide connections for D’s 800 mobile phones under a mobile network service supplied by EE. D signed a purchase order form but cancelled the order shortly afterwards, before the connections had taken place. By signing the purchase order form, D acknowledged that it had accessed and read the standard terms and conditions (ST&C) on C’s website, when in reality it had not.
C commenced a claim alleging that it was entitled to an administration charge of £180,000 (£225 for each of the 800 connections) pursuant to a clause in its ST&C. D denied there was a contract or, in the alternative, that the clause raised by C was incorporated due to its unusual and onerous nature. The High Court grappled with the usual legal principle that a person who signs a document is bound by its terms, including those incorporated by reference (i.e. by reference to terms found on a party’s website), whether or not they had read them. The judge commented that the clause in question was “cunningly concealed in the middle of a dense thicket which none but the most dedicated could have been expected to discover and extricate…”
The Judge decided that the ST&C were incorporated into the contract, but that the specific clause relied upon by C to justify its claim was not incorporated (and in any event was void due to its penal nature). Where there are standard terms, a condition which is particularly onerous or unusual will not be incorporated into the contract unless the party relying on it has fairly and reasonably brought it to the other party’s attention. This decision suggests a distinction between including an onerous term in a contract signed by the parties, and including it from elsewhere in standard terms which are incorporated in the contract by reference. In the former case, the term is likely to have been adequately brought to the signing party’s notice without further ado (in all but extreme cases) but not in the latter case.
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