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Digital link held sufficient notice of standard contract terms

8 July 2019

A party's standard terms were incorporated into a contract concluded electronically when they were accessible via a live link on the party's purchase order form, placed in close proximity to the signature line completed by the other party, who knew or ought to have known that the first party intended that the contract be regulated by those standard terms.

Sheriff Nigel Ross at Edinburgh Sheriff Court gave the decision in a preliminary proof in an action by Difference Corporation Ltd against Unitel Direct Ltd, seeking payment under a contract to provide a direct dialler product to the defenders. The defenders counterclaimed on the basis of defective goods, claiming loss of profit including consequential and indirect loss. Liability for such claims was limited by the pursuers' standard terms.

The parties had been in a contractual relationship since 2014, but the sheriff found it not proved that the defenders were aware of the standard terms from that point, though it had been the pursuers' intention that they would apply. In 2017 they entered negotiations for a new contract. The sheriff found that the contract was formed by the pursuers' purchase order form dated 13 June which was electronically signed by the defenders' Mr Williamson on 3 July, that the existence of the pursuers' standard terms had been fairly brought to the defenders' notice and that they former part of the 2017 contract.

Sheriff Ross said the incorporation of terms in a contract was in every case a matter of facts and circumstances. He considered the following factors:

  • The means of constitution – the purchase order comprised a single page, drafted in simple terms, mainly a table of charges followed by three sentences, stating the term of the contract, that payment would be by direct debit, and that the terms and conditions could be seen at an external link, accessed by a hyperlink on the purchase order form. The signature line followed immediately. “It was all but impossible for anyone, far less an experienced businessman, to claim that they did not realise that the pursuer intended its own standard terms to regulate the contract”, the sheriff stated.
  • The events surrounding the act of signature – the sheriff did not accept that Mr Wilkinson was being rushed to conclude the contract, and although the parties were of different sizes and resources, that was not such as to render their bargaining position unequal or unfair.

“There are no other reasons to identify that Mr Wilkinson did not understand, or by his signature and actings accept, that the pursuer’s terms and conditions applied”, the sheriff continued.

While the clause went further in its effect than the pursuers' director who gave evidence said he intended, it was not unduly onerous, and given that Mr Wilkinson was an experienced person of business, the limitation could not be regarded as unexpected or unfair. Given the contract price of £2,025 per month and that the counterclaim totalled about £56,000, the proportionality of the competing interests pointed to the same conclusion.

Sheriff Ross also rejected the contention that the clause fell foul of the reasonableness tests in s 17 of the Unfair Contract Terms Act 1977.

However it was not effective to displace a claim for repetition of sums paid under the contract. A case management conference would be fixed to discuss further procedure.

Click here to view the opinion of the court.

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