La Rosa v Nudrill Pty Ltd [2013] WASCA 18
If two parties have been dealing with each other regularly for over 10 years, are they considered to have notice of the terms and conditions on the back of the invoices? This was the issue before the WA Court of Appeal in La Rosa v Nudrill Pty Ltd, which highlights the dangers of not providing the terms of your contract to the other party before the services are delivered.
Background
Mr La Rosa ran a transport business and Nudrill was a longstanding client. The arrangement between the two, over a period of over 10 years, was that Nudrill would phone Mr La Rosa and book the transport services. Following the transport of the cargo, Mr La Rosa would send an invoice that contained terms and conditions on the back.
In this case, following a telephone order of the services, Mr La Rosa transported Nudrill's drill rig but damaged it when it fell off because of Mr La Rosa's negligence in driving the vehicle at excessive speed.
Mr La Rosa argued that the exclusion clause on the back of the invoices that he provided to Nudrill stating that "all goods are handled, lifted or carried at the owner's risk" meant that he was not liable for the damage.
Issues
The key issue was whether the parties, by their past conduct, had incorporated the exclusion clause into the contract.
Decision
Buss JA held that there is no single test for determining whether a term is incorporated into a contract as a result of prior dealings. He stated that it will be a "question of fact and degree" in each case based on the prior conduct of the parties as a whole.
Buss JA discussed several factors that are relevant to the court in determining whether a term was incorporated into a contract, noting that this was not an exhaustive list, including:
- the number of prior dealings
- how recent the prior dealings were, and
- the consistency between the prior conduct and the dealing in question.
The Court of Appeal unanimously held that the receipt of invoices by Nudrill was, in these circumstances, not sufficient to justify an inference that it had accepted or was willing to be bound by the terms printed on the back of the invoices.
Of particular relevance to the Court of Appeal was:
- there was no evidence that Nudrill had actually read the terms, and
- it was reasonable for a person to regard the invoice as simply a request for payment rather than a document containing contractual terms governing the transaction that had already occurred.
Implications
This case highlights the danger of contracting to provide services without having explicitly agreed the terms and conditions of the contract, especially dangerous when negotiating an oral contract. The fact that a person has contracted with you before does not mean that a term will always be incorporated into a contract because of the prior dealings.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
