Civil Engineering Reference
In-Depth Information
hecourtswillconsiderifthewordsusedonthefaceofadocumentarereason-
ably capable of being understood as intended to incorporate the particular terms, see
Rooneyandanother
v.
CSEBournemouthLtd
(2010).Adequatenoticeoftermsmustbe
given, and the courts will consider if the parties intended that particular terms should
be incorporated. See
Cubitt Building and Interiors Ltd
v.
Richardson Roofing (Indus-
trial) Ltd
(2008), where terms which were said to be attached to the order were not in
factsoattached,anditwasheldthatthismeantthepartiesdidnotintendforthemto
be incorporated. Of particular note are cases where documents have been sent by fax
but terms and conditions printed on the back of those documents have not also been
faxed.Inthesecircumstances,thecourtsareunlikelytoconcludethatthesehavebeen
sufficiently incorporated, see
J Murphy & Sons Ltd
v.
Johnston Precast Ltd
(2008).
The TCC case of
Allen Fabrications Limited
v.
ASD Ltd
(2012) is interesting for its
summary of incorporation of standard terms and conditions. The court set out the
two ways this may happen: either they may be on or referred to in a document that is
provided to the other party prior to or at the time the contract is entered into, or they
maybeinorreferredtoinapost-contractualdocument(e.g.onaninvoice)where
there is a prior course of dealing between the parties using those documents, so that
it can be inferred that the parties intended to contract on those terms.
heforegoingscenarioenvisages,however,thatthetermsofanyconditionsreferred
to will be suitable in the circumstances, for example, that a sub-contract relation-
ship will be governed by known sub-contract terms. What is more problematic and,
indeed, a relatively common occurrence in the construction industry, is where party
A attempts to impose the terms and conditions to which it is subject, for example,
under a main contract, into a sub-contract which they have entered into with party B.
This is commonly referred to as a 'back to back' arrangement.
This issue was considered by the Outer House of the Court of Session in
Parklea
Ltd
v.
W&JRWatsonLtd
(1988). Here a sub-contract purported to incorporate
the main contract conditions into the sub-contract that also contained other express
terms. A dispute arose as to whether the arbitration clause in the main contract was
applicable to the sub-contract. A number of principles emerge from this case that are
of guidance in assessing whether such terms are capable of incorporation:
•
The starting point must be to consider whether the parties have incorporated the
whole of the main contract conditions; it is irrelevant that some (and not others) of
theconditionswouldhaveittedveryneatlyintothesub-contractconditions.
•
Do the words incorporating the sub-contract conditions make clear that they are
applicable to the exclusion of all other provisions? It was held that a reference to the
main contract conditions 'solely regulating' the relationship between the parties
was not indicative of an exclusion of all other conditions; the subsequent refer-
ence to the applicability of the main contract provisions being excluded where they
conflicted with other express terms of the sub-contract mitigated against such a
construction.
•
Where the purportedly incorporated terms conflict or duplicate other express
terms of the sub-contract or duplicate the terms of the main contract, this will
militate against the conclusion that the main contract terms will exclusively
regulate the parties' contractual relationship.
