British Crane Hire Corpn Ltd v Ipswich Plant Hire Ltd

Terms may be incorporated into an oral contract by the parties’ common understanding, even where a later printed form remains unsigned. This may occur where commercial parties of equal bargaining power operate in the same trade, know that transactions of the relevant kind are habitually governed by standard conditions, and understand the substance of those conditions.

A condition allocating responsibility for recovering hired machinery from soft ground may apply where the machinery sinks without either party’s fault. Clear words are required, however, before such a condition will relieve an owner from responsibility for the negligence of its own servant.

Two plant-hire businesses made an urgent oral agreement for the hire of a dragline crane and its driver. The crane was supplied before the owner’s usual printed conditions were sent or signed. During the work it sank twice on marshy ground. The first sinking resulted from the driver’s negligence. The second occurred while timber supports were being used and was treated by the Court of Appeal as occurring without either party’s negligence.

The deputy judge held the hirer responsible for the second recovery operation. The hirer appealed, while the owner cross-appealed concerning the first mishap. The central issue was whether the owner’s usual conditions formed part of the oral contract and allocated the recovery costs.

1. Appeal and cross-appeal dismissed unanimously. Lord Denning MR, with whom Megaw LJ agreed, and Sir Eric Sachs concluded that the hirer was liable for the expense of recovering the crane after the second mishap. The deputy judge’s result was affirmed on the different ground that the owner’s usual conditions formed part of the contract.

2. The second sinking was to be approached on the basis that neither party was negligent. The finding that the hirer’s site agent had negligently selected the route could not safely be sustained. The sinking was a risk inherent in operating heavy machinery on marshy ground.

3. The printed conditions were incorporated through the parties’ common understanding. Both were established plant-hire businesses of equal bargaining power. They knew that machinery of this kind was ordinarily hired subject to printed conditions, and they understood the substance of the customary allocation of responsibility for soft ground and recovery. Applying the objective approach stated in McCutcheon’s case, the owner was reasonably entitled to conclude that the urgent supply was accepted on its usual conditions, although the form followed later and remained unsigned.

4. Hollier v Rambler Motors [1972] 2 Q.B. 76 was distinguishable. It concerned a private customer dealing with a commercial garage and only a few transactions over several years. Here both parties belonged to the same trade and possessed relevant commercial knowledge. The court relied principally on their shared understanding rather than the two earlier transactions between them.

5. Conditions 6 and 8 placed responsibility for the second recovery operation on the hirer. They required the hirer to ensure that the ground was suitable, to supply necessary timber, to recover the crane from soft ground, and to indemnify the owner against expenses arising from use of the plant.

6. Those conditions did not extend to the first mishap, which was caused by the negligence of the owner’s driver. Applying Gillespie’s case, very clear words were required to relieve a contracting party from responsibility for its own negligence, and the conditions contained no such words.

7. Lord Denning MR and Sir Eric Sachs also considered the hirer’s common-law duty as bailee. Sir Eric Sachs stated that the obligation to return a hired chattel was not absolute: the hirer must return it unless good cause was shown, depending on the facts and degree. Becoming stuck in a marsh would not normally constitute good cause. This issue had not been sufficiently pleaded or tried, so the decision was not based upon it.

1. Court of Appeal: The hirer’s appeal and the owner’s cross-appeal were dismissed with costs. The deputy judge’s result concerning the second mishap was affirmed on the different ground that the owner’s usual contractual conditions were incorporated: [1975] QB 303.

2. Deputy judge: Deputy Judge Kenneth Jones held the hirer liable for the expense associated with the second sinking. No report citation for that judgment is stated.