Must an onerous standard condition be specifically flagged before it forms part of a contract of sale?

SCCSI
Presented by
Society of Construction Claims Specialists International
sccsinternational.org
Legal and contractual solutions - Rights and remedies

Is an onerous term in a supplier's standard conditions of sale binding when it was not specifically flagged to the other party?

Onerous terms, caveat emptor and the duty to flag

A commercial contract is governed by caveat emptor, but a party cannot spring an onerous standard term on the other. An onerous condition that is not fairly drawn to attention may not be part of the contract.

Quick answer

A party relying on a particularly onerous or unusual term in its own standard conditions must fairly bring it to the other party attention when the contract is made, or the term is not incorporated, as Interfoto shows, so an onerous condition buried on the reverse of a quotation, or not referred to on its face, may be unenforceable

A party relying on a particularly onerous or unusual term in its own standard conditions must fairly bring it to the other party's attention when the contract is made, or the term is not incorporated. Consumer-protection rules largely do not apply to commercial contracts, which are governed by caveat emptor, but in Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd the Court of Appeal held that an onerous holding-fee condition that was not drawn to attention did not form part of the contract, and the charge was reduced. The principle reaches construction: in Worksop Tarmacadam Co Ltd v Hannaby a re-measurement clause on the reverse of a tender that appeared to offer a lump sum was too vague and onerous to bind without specific attention, so the contractor could not recover for unforeseen ground. And in P4 Ltd v Unite Integrated Solutions a retention of title clause on the reverse of a faxed quotation, not referred to on the face, was not incorporated. An onerous condition buried on the reverse of a quotation, or not flagged on its face, may be unenforceable.

Caveat emptorA commercial contract is generally governed by let the buyer beware
The exceptionAn onerous standard term must be fairly drawn to attention
InterfotoAn onerous holding fee not drawn to attention was not incorporated
WorksopA vague, onerous re-measurement clause on the reverse did not bind
P4 v UniteRetention of title on a faxed reverse, not on the face, was not incorporated

The rest of this solution is for members

Fifty of the two hundred contractual solutions are free to read. This is one of the remaining hundred and fifty, which Premium and Pro carry.

See what Premium includesAlready a member? Sign in