Advanced Contract Law Lecture 3b 13/10/19
Incorporation
Overview
¤ Incorporation of terms
¤ Implied terms
¤ Standard form contracts
¤ Exclusion clauses
¤ Unfair Contracts Terms Act 1977
¤ Good faith
Incorporation of Terms
> Incorporation as part of formation
> Incorporation by signature
> Incorporation by notice
> Incorporation by course of dealing or custom
Incorporation by Signature
L’Estrange v F Graucob Ltd. [1934] 2 KB 394- a signature means that a contract is binding
“This agreement contains all the terms and conditions under which I agree to purchase the machine
specified above and any express or implied condition, statement or warranty, statutory or otherwise
not stated herein is hereby excluded”
L’Estrange v F Graucob Ltd.
• Trial court: Exclusion clause not incorporated as defendants have not done reasonably
enough to bring the conditions to the notice of the plaintiff.
• Court of Appeal: There was no misrepresentation and plaintiff is bound by signature.
• See particularly Scrutton LJ
Exceptions to Signature Rule
• Non est factum: if the party is unable to understand a document due to ‘defective education,
illness or innate incapacity.’
• Induced through misrepresentation
• Document must have contractual effect
• Certain statutory rights cannot be excluded [UCTA 1977]
Signature Rule: Recent Developments
• Tilden Rent-a-Car v Clendinning (1978) 83DLR (3d) 400 – CA- Canadian, Ontario- persuasive
• Party seeking to rely on onerous terms should take reasonable measures to draw such terms
to the attention of the other party. Whether it is reasonable that the signator accepted
these terms. More onerous the more effort to draw attention to other party.
• English Courts still follow L’Estrange
Incorporation
Overview
¤ Incorporation of terms
¤ Implied terms
¤ Standard form contracts
¤ Exclusion clauses
¤ Unfair Contracts Terms Act 1977
¤ Good faith
Incorporation of Terms
> Incorporation as part of formation
> Incorporation by signature
> Incorporation by notice
> Incorporation by course of dealing or custom
Incorporation by Signature
L’Estrange v F Graucob Ltd. [1934] 2 KB 394- a signature means that a contract is binding
“This agreement contains all the terms and conditions under which I agree to purchase the machine
specified above and any express or implied condition, statement or warranty, statutory or otherwise
not stated herein is hereby excluded”
L’Estrange v F Graucob Ltd.
• Trial court: Exclusion clause not incorporated as defendants have not done reasonably
enough to bring the conditions to the notice of the plaintiff.
• Court of Appeal: There was no misrepresentation and plaintiff is bound by signature.
• See particularly Scrutton LJ
Exceptions to Signature Rule
• Non est factum: if the party is unable to understand a document due to ‘defective education,
illness or innate incapacity.’
• Induced through misrepresentation
• Document must have contractual effect
• Certain statutory rights cannot be excluded [UCTA 1977]
Signature Rule: Recent Developments
• Tilden Rent-a-Car v Clendinning (1978) 83DLR (3d) 400 – CA- Canadian, Ontario- persuasive
• Party seeking to rely on onerous terms should take reasonable measures to draw such terms
to the attention of the other party. Whether it is reasonable that the signator accepted
these terms. More onerous the more effort to draw attention to other party.
• English Courts still follow L’Estrange
