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Be Careful You Don't Sign Your Life Away

13 Aug 10 The defenders hired an excavator from the pursuers to be used in the construction of a conservatory at a house in Irvine. The defenders had hired equipment from the pursuers on a number of occasions previously.

The contract was an oral one, made during a telephone conversation between the parties on or about January 2008. The defenders used subcontractors as well as their own labour force for elements of the work. When the excavator was delivered to site, the hire advice note containing the terms and conditions on the reverse was signed by an unknown worker who was also given a copy. The work was completed, and the defenders phoned the pursuers to say they could remove the excavator. Before they could, the excavator was stolen.

The defenders argued that the contract had been concluded during the telephone conversation so that the pursuers could not vary its terms once it had been concluded. Clause 22 of the pursuers' terms and conditions which were expressly incorporated within article 3 stated that: "the acceptance of any equipment or services from the owners, by the hirer on site, would constitute the acceptance of the terms and conditions as laid out in this contract". The defenders argument was that the pursuers had failed to aver that anyone with authority had accepted delivery and signed the advice note. The pursuers' view was that they had reasonably assumed that the person accepting delivery had had the authority to bind the defendants. They argued that the hire advice note had been intended to have contractual effect and was not just a receipt.

The defenders' position was that there was no basis upon which the pursuers were entitled to assume that the person who had signed the Hire Advice Note had had any authority to bind them contractually. He had not seen the pursuers' terms and conditions let alone read them.

Having reviewed the authorities, it was clear that there was a whole area of situations where documents which might be considered to be administrative may have contractual effect. In addition, there was also the principle that a course of dealing can incorporate conditions which might not otherwise form part of a contract.

The delivery note had stated: "all offers and sales are subject to the company's current terms and conditions of sale, a copy of which will be supplied on request". The defenders had admitted that there was a course of dealing and in the weeks leading up to the present incident, there had been seven occasions when advice notes had been signed and not always by people who worked for the defenders. One of them, Mr. Arkinson, was described as a self-employed subcontractor, although also known as the defenders' Installations Manager. His position and authority needed further investigation, although the inference was that as Installations Manager, he held a position of some authority. To be both a self-employed subcontractor and also the defenders' Installations Manager was an unusual situation.

Whilst the pursuers' pleadings contained a good deal of information about the parties' previous transactions, the court was satisfied that the correct approach was to reserve final determination of the question of law until an enquiry into the facts had been undertaken.

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However, the judge was not persuaded that the defenders had absolved themselves from any liability by simply telephoning the pursuers and advising them that the excavator was no longer required. They were under a common law obligation to restore an item of hire. The burden of proof was on the hirer to show the cause of any loss, and that he had not been responsible for it. It was for the defenders to explain what had happened and what steps they had taken to prevent the loss.

Trigon Tools Ltd. v Andrew Wright (PVC) Ltd.; 20 July 2010

Also in this week's Bliss Books subscription bulletin:

Aggregation of Breaches of Warranty into a "Fundamental Defect";

Reserving Rights to Object to an Adjudictor's Jurisdiction and Estoppel;

Was an Adjudicator's "Statement" a "Decision"? 

Subscriptions to the full weekly case law digest start at as little as £150.00 a year. That's cheaper that other construction law services, and cases are reported more quickly. Can you afford to be without it? 

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