Contractual status of signed delivery dockets
In Noreside Construction Ltd. v Irish Asphalt Ltd the issue was what were the terms of the supply contract between the parties, and the contractual status of the delivery dockets signed when aggregate was delivered to site.
The claimant was a contractor and the defendant the operator of a quarry which produced construction products for the industry. The claimant was awarded a contract for the construction of a number of houses by Dublin City Council and faxed the defendant with a Purchase Order, with an original sent by post, for the supply of aggregate. The Purchase Order Conditions" were printed on the reverse of the original Purchase Order sent by fax and received, at the latest, by the defendant, on 28 March, 2003. The defendant commenced supplying materials in 2003 and this continued until 2005. A delivery docket signed for each delivery on behalf of the defendant and on behalf of the claimant, either by a site employee or a haulier on its behalf. Each delivery docket stated, on its face, at the bottom:
"This material is sold subject to the terms and conditions available on request".
In 2008, the defendant advised the claimant that the aggregate contained pyrite and should not be used as under floor infill in any building or within 500 millimetres of any concrete or steel structure. Dublin City Council notified the claimant of its intention to make a claim against it, and the claimant sought an indemnity, relying upon an indemnity clause in its Purchase Order Term and Conditions. The defendant denied that the claimant’s Ts &Cs applied to their contract. The defendant alleged that the applicable terms and conditions were those made on its delivery dockets and referred to in communications from the defendant to the claimant prior to March 2003. It maintained that these had been incorporated into the contract or contracts with the claimant.
On the evidence, the court found that the parties had reached an oral agreement about the supply of the aggregate. This agreement did not have to be in writing. There were also some implied terms the claimant's signed, written Purchase Order and the credit application completed by the claimant. There were also implied terms as to the manner in which the contract would be performed, including the ordering system by oral "call offs" placed by telephone by the site manager or other operative from the claimant's construction site at Finglas to the defendant's operative on the weighbridge at Baylane, and the recording of the aggregate supplied by the use of delivery dockets in accordance with a well established practice between the quarry and construction industries.
These delivery dockets were all post-contractual, unless they had the effect either of making a new and distinct contract, or of varying the existing contract. Any analysis must be based upon the facts of this case. The dockets were crucial as the written record of the amount and type of aggregate delivered and the time, date and place of delivery. They made no reference as to price. The defendant's evidence was that a signed delivery docket was essential to enable it to obtain and enforce payment for the loads supplied or delivered. Similarly, the claimant's evidence was that they were crucial for the purpose of checking its potential liability to pay the defendant. The delivery dockets were signed on behalf of the defendant by the weighbridge operator. He had not had the authority. The delivery dockets had a contractual purpose in the sense of being a document used in the execution of the contract which came into existence on 26 March, 2003. They did not have contractual effect in the sense of making or varying a contract. No reasonable man nor any haulier or site operative signing a delivery docket on behalf of the claimant would have understood that his signing of the delivery docket potentially varied the terms of the contract already agreed according to which the aggregate was being supplied.
The system in operation between the parties was that the contractual terms applicable to supply were agreed at senior management level. Once agreed, they were to last for the duration of the claimant's construction contract at the Finglas site.
Noreside Construction Ltd. v Irish Asphalt Ltd.,  IEHC 364
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This article was published on 29/10/2011 (last updated on 28/10/2011).