Offer negotiation Offers or invitations to ‘treat’ Acceptance 4

4. Incorporation of Terms into Contract

• 
  Parker v. South East Railway (1877): reasonable steps taken to incorporate are a question of fact.
  
• 
  Balmain New Ferry Co. v. Robertson (1906): Charges on noticeboard near ferry turnstiles. Pay on entering/leaving wharf. Difficult to avoid seeing. Reasonable notice given. Consider:
  

1. 
   Nature of referring doc
   
2. 
   Access to incorporated doc
   
3. 
   Identification of applicable terms
   
4. 
   Time of incorporation (before acceptance)
   

• 
  Olly v. Marlborough Court Hotel: Notice on back of door  Too late
  

5. 
   Nature of clause: is it unusual?
   

• 
  Thornton v. Shoe Lane Parking: the more unusual the clause the greater notice must be given of it  Lord Denning’s “red hand” test.
  
  1. 
     Large notice at entrance warning of car damage not liability for injury
     
  2. 
     Ticket “subject to conditions…displayed on premises”. impossible to read in queue
     
  3. 
     Further notice inside building as to no injury liability. This required more notice
     

• 
  Interfoto v Stiletto [1989] QB: Principles apply to any onerous clause, not just exemptions
  
• 
  *Oceanic Sun Line v Fay CLR (1988): booking in NSW for Greece cruise. Glossy brochure included terms. Invoice sent and fair paid in return for exchange order for ticket. Ticket included more terms: Greek courts had jurisdiction and complete agreement. P injured on cruise, sued in NSW.
  

• 
  terms on ticket not part of contract, contract on payment and exchange order issue
  
• 
  Toohey and Wilson jj: brochure not contractual in nature but advertising material
  
• 
  Brennan J: Exchange order = contract, terms in ticket to late. Did not do all reasonably necessary to bring attention to clause
  

• 
  *Baltic Shipping v. Dillon (1991) NSCA: saw travel brochure, paid deposit through travel agent. then received a booking form: “this is not a travel doc” and “contract for carriage will be made at time of issuing of tickets and subject to those terms. These are available at offices.” paid fare and received ticket 2 weeks before cruise. tickets limited liability for injury and loss.
  

• 
  terms had not formed part of contract, even if they did, P was not bound by terms
  
• 
  Gleeson: All reasonably necessary to give her opportunity to decline contract not done
  
• 
  Kirby: once contract was created new terms could not be added. unless passenger took initiatives of her own, she would have had no knowledge, or opportunity to influence, the conditions - availability at office not sufficient. “units of account” meaningless compared to $. would not have read terms ‘only bored lawyers actually read the fine print of terms ’
  
• 
  Mahoney: thought passengers would understand terms, they where plan, and should be expected to peruse (not judges place to say they wouldn't)
  

• 
  Causer v. Browne [1952]: incorporating doc must be contractual: unsigned dry cleaning docket
  
• 
  Oceanic Sun Line v Fay and Baltic Shipping v. Dillon: Access to terms
  

Implied terms

A. Terms Implied by the Courts

Parties don’t expressly provide for everything. Courts limited in capacity to fill gaps. Evidence of surrounding circumstances is admissible if language is ambiguous and it doesn't contradict express terms (codelfa).

1. Implied by Custom (bakers dozen, rarely used)

• 
  Con-Stan Industries v Norwich [1986 HC]: Strict requirements:
  

1. 
   Existence of a custom is a question of fact not law
   
2. 
   Evidence matters relied on so well known and acquiesced uses it (knowledge not required)
   
3. 
   term will not be implied where it is contrary to the express terms of the agreement.
   

• 
  Course of Dealing: McCutcheon v. MacBrayne [1964]: 'risk note’ sometimes signed not sufficient
  

2. Terms Implied in Fact (specific)

B.P. (Refinery) v. Shire of Hastings (1978) (PC): (use of abstract test over intent criticised)

1. 
   Be reasonable and equitable (can term be expressed to conform with presumed intent?)
   
2. 
   Be necessary to give business efficacy to contract (According to reasonable persons)
   
3. 
   Be so obvious it goes without saying (Codelfa, mason: injunction cost not obvious - common assumption)
   
4. 
   Be capable of clear expression
   
5. 
   Not contradict any express term
   

1. 
   Presumed intent of parties: Moorcock (1889): Vessel damages bottom at wharf. Held: implied term necessary to give business efficacy
   

• 
  B.P: unlikely BP presumed intent to operate against itself so that only its Aus branch would get discount
  
• 
  Codelfa v State Rail Authority [1974 HC]: parties assumed continuous 24/6 working based on their lawyers saying they’d have immunity from nuisance injunction. Residents obtained injunction restricting hours. Contractor claimed extra cost. No implied term of indemnity. Mason:
  
  • 
    rectification = term omitted was agreed upon. implied term = not actually agreed. General reluctance to imply. Legal advise proves contemplation, if asked both parties would have said intent was to put liability on the other. Obvious provision not omitted, parties made common assumption which masked need to make provision for event which negotiation would have yielded.
    

2. 
   Officious Bystander: Shirlaw v. Southern Foundries: If asked by “Officious Bystander” what would parties have stated they intended? term “So obvious it goes without saying”? parties may argue that was never intention