Essential Cases: Contract Law provides a bridge between course textbooks and key case judgments. This case document summarizes the facts and decision in L’Estrange v Graucob Ltd [1934] 2 KB 394. The document also includes supporting commentary from author Nicola Jackson.
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L’Estrange v Graucob Ltd [1934] 2 KB 394
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9. Incorporation of Terms
This chapter discusses the incorporation of terms into a contract. Three principal options are available to ensure the incorporation of terms, the first of which is to make sure that the other party to the contract signs the document that contains all the relevant terms. A party is generally bound by terms he has signed, whether or not he has read them. The second option is to take reasonable steps to bring the terms to the notice of the other party. In order to be effective the notice must have been given at or before the time of contracting, in a document that was intended to have contractual effect, and reasonable steps must have been taken to bring the terms to the attention of the other party. The third option is incorporation by course of dealing or by custom. In order to constitute a ‘course of dealing’ there must have been a series of transactions between the parties that was both ‘consistent’ and ‘regular’.
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9. Incorporation of Terms
This chapter discusses the incorporation of terms into a contract. Three principal options are available to ensure the incorporation of terms, the first of which is to make sure that the other party to the contract signs the document that contains all the relevant terms. A party is generally bound by terms he has signed, whether or not he has read them. The second option is to take reasonable steps to bring the terms to the notice of the other party. In order to be effective the notice must have been given at or before the time of contracting, in a document that was intended to have contractual effect, and reasonable steps must have been taken to bring the terms to the attention of the other party. The third option is incorporation by course of dealing or by custom. In order to constitute a ‘course of dealing’ there must have been a series of transactions between the parties that was both ‘consistent’ and ‘regular’.
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3. The law of treaties
This chapter examines the rules of international law governing the birth, the life, and the death of treaties. Treaties, a formal source of international law, are agreements in written form between States or international organizations that are subject to international law. A treaty falls under the definition of the Vienna Convention on the Law of Treaties (VCLT), no matter what form or title it may have. The most important factor is that it sets out obligations or entitlements under international law. The VCLT enumerates the rules governing the ‘birth’, ie the steps from the negotiation until the entry into force of the treaty; the ‘life’, ie the interpretation and application of the treaty; and its ‘demise’, ie its termination. The two fundamental tenets are, on the one hand, the principle ‘pacta sunt servanda’ and, on the other, the principle of contractual freedom of the parties.
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5. Content of the contract and principles of interpretation
Robert Merkin KC, Séverine Saintier, and Jill Poole
Poole’s Casebook on Contract Law provides a comprehensive selection of case law that addresses all aspects of the subject encountered on undergraduate courses. This chapter examines what the parties to a contract have undertaken to do; that is, the terms of the contract, and the principles determining how the courts interpret the meaning of those contractual terms. It considers whether pre-contractual statements are terms or mere representations. The chapter then turns to written contracts, focusing on the parol evidence rule, entire agreement clauses, and the effect of signature on the contractual document. It also discusses oral contracts and incorporation of written terms in such contracts by means of signature, reasonable notice, consistent course of dealing, and common knowledge of the parties. In addition to express terms, this chapter looks at how terms are implied, particularly terms implied by the courts—terms implied in law and terms implied in fact. There is discussion of the typical implied terms in sale and supply contracts in the B2B and B2C context. Finally, this chapter focuses on the principles governing the interpretation of contractual terms.
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9. Exemption clauses
This chapter begins the discussion of unfair terms. It deals with the common law rules relating to exemption clauses, and introduces the problems, as well as the benefits of standard form contracts. It looks at the common law rules dealing with incorporation and construction (interpretation) generally, and their use by the courts to deal with unfair exemption clauses, and the evolution of the use of such approaches in the light of legislative policing. In particular, it deals with incorporation by signature, notice (including the ‘red hand’ rule), and a course of dealing. It looks at construction post-UCTA (Unfair Contract Terms Act 1977), and post-Investors, particularly Wood v Capita and decisions since. The Canada Steamship rules and the distinction between limitation and exclusion clauses are noted. The tension between freedom of contract and protecting the party with weaker bargaining power is emphasized. The chapter addresses how the Consumer Rights Act 2015 has impacted the law.
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5. Content of the contract and principles of interpretation
Robert Merkin KC, Séverine Saintier, and Jill Poole
Course-focused and comprehensive, Poole’s Textbook on Contract Law provides an accessible overview of the key areas of the law curriculum. This chapter explores how the terms of the parties’ agreement (that is, the contractual promise to be performed) are identified and how the courts interpret the meaning of those terms. It considers the status of statements made prior to the conclusion of the contract (as terms or representations) and why this matters. The parol evidence rule applies where the contract is written and provides that the writing represents the entire contract. This definition is flawed, however, because it allows the rule to be sidestepped by defining the contract as partly written and partly oral. Alternatively, an oral term can take effect as a collateral contract, which is separate to any written contract to which the parol evidence rule applies. The effect of the parol evidence rules can be achieved by incorporating an entire agreement clause. This chapter also considers the effect and impact of a no oral modification clause (or NOM). This chapter examines methods of achieving incorporation of terms such as signature, reasonable notice (or a higher standard of notice if the term is onerous or unusual), consistent course of dealing and common knowledge of the parties. In addition to the express terms, there may be terms implied by custom, by courts or by statute. Finally, the chapter considers the principles on which contracts are interpreted including the relevance, or otherwise, of pre-contractual negotiations.
