The court considered the effect of a driver’s behaviour on the ability to claim under his insurance policy, on the basis that his behaviour would constitute ‘wilful misconduct’. Taylor LJ: ‘Mr Malins has sought to argue that although Huggins (the driver in that case) wilfully, in the sense of deliberately, left the van unlocked and the keys in the ignition, he was not wilfully negligent or in breach of duty. I cannot accept this. On the learned judge’s findings, Huggins was fully conscious not only that he was leaving the vehicle unsecured but that in doing so he was acting in breach of his instructions and in such circumstances as to expose the goods to risk of theft. He deliberately took a chance knowing he was acting in breach of his duty but hoping for the best. In so doing, he was in my judgment clearly guilty of wilful neglect.’
Bingham LJ considered the question whether standard terms had been incorporated into a contract when the basis of incorporation being relied on was a reference to the terms over a course of dealings on invoices i.e. on documents sent after the execution of a number of oral contracts: ‘Between March and August 1983 the plaintiffs delivered to the defendants at least 11, perhaps 13 or 14, invoices. These related to business done between the parties pursuant to oral contracts. There was no other contract document between these parties other than the invoice. Each invoice bore the legend –
All business is transacted by the company under the current trading conditions of the Institute of Freight Forwarders, a copy of which is available on request.
That lettering was clear and legible. It was placed immediately below the price payable on the invoice where the eye would naturally light on it. Mr Zacaria personally looked at the invoices as they arrived. He did not see the reference to the IFF conditions before the loss, but he knew that freight forwarders normally deal on standard terms and he must have seen some writing on the invoice. The defendants’ own invoices bore a somewhat similar – although in their case meaningless – legend in a somewhat similar position.
Applying to this case the question posed by Lord Justice Ackner (as he then was) in Keeton Sons Ltd v Carl Prior Ltd Mar 13 1985 (unreported), ‘Has reasonable notice of the terms been given?’, the only possible answer in my judgment is that it has. The Judge decided otherwise on the ground that terms should have been recited in extensor and not simply incorporated by reference, but, whatever the rule in other jurisdictions, the clear rule of English law is that clear words of reference suffice to incorporate the terms referred to: see, for example, Smith v South Wales Switchgear Co Ltd [1978] 1 WLR 165. I therefore conclude that the IFF standard trading conditions were effectively incorporated into the contract, and I would accordingly allow the appeal on this first issue’
Judges:
Taylor LJ, Bingham LJ
Citations:
[1988] 2 Lloyds Reports 427
Jurisdiction:
England and Wales
Citing:
Cited – Smith v UMB Chrysler (Scotland) Ltd HL 9-Nov-1977
The principles set out in Canada Steamship apply to ‘clauses which purport to exempt one party to a contract from liability’. The principles should be applied without ‘mechanistic construction’.
Lord Keith of Kinkel said: The tests were . .
Cited – Keeton Sons and Co Ltd v Carl Prior Ltd CA 14-Mar-1985
The test of whether a clause has been incorporated into a contract is ‘Has reasonable notice of the terms been given?’. . .
Cited by:
Cited – Laceys Footwear (Wholesale) Ltd v Bowler International Freight Ltd and Another CA 18-Apr-1997
The defendant’s driver had taken a consignment of shoes to Spain, where they were stolen. The plaintiff alleged his gross negligence amounted to ‘wilful misconduct’ so as to disapply an exemption clause.
Held: Whether a bailee’s acts . .
Cited – Sumukan Ltd v The Commonwealth Secretariat CA 21-Mar-2007
The appellants sought to challenge a finding that they had by their contract with the defendants excluded the right to appeal to a court on a point of law. The defendants replied that the appeal court had no jurisdiction to hear such an appeal.
Cited – Lidl UK Gmbh v Hertford Foods Ltd and Another CA 20-Jun-2001
The respondent had contracted to supply tinned corned beef to the appellant, but had become unable to fulfil the orders because of industrial action in Brazil. The appellant had purchased supplies elsewhere and set off the cost of that against the . .
Lists of cited by and citing cases may be incomplete.
Insurance, Contract
Updated: 29 April 2022; Ref: scu.187694
