Photolibrary Group Ltd (t/a Garden Picture Library) & Ors v Burda Senator Verlag GmbH & Ors

In a commercial relationship involving repeated deliveries, terms printed on delivery notes may become contractual through the parties’ course of dealing. A delivery of goods accompanied by terms may constitute an offer accepted by retaining and using the goods.

Standard industry terms known to the recipient will generally be incorporated, particularly where the recipient neither rejects them nor returns the goods. The special notice requirement applicable to unusual or onerous terms does not apply where the terms are standard, plainly stated and familiar to the parties. Negotiating previous claims down for goodwill does not, without more, waive the right to rely on the full contractual term.

The claimants supplied photographic transparencies to German magazine publishers through the defendants’ London office. A substantial number of transparencies were lost in transit. The claimants sought to rely on delivery-note terms providing for loss fees and holding fees.

The court was directed to determine the preliminary issue concerning the contractual terms governing the supplies. The central questions were whether contracts existed, whether the delivery-note terms were incorporated, whether the London office had authority to agree them, and whether the claimants had waived or were estopped from relying on those terms.

1. Contracts and incorporation. Each delivery of transparencies accompanied by a delivery note was an offer accepted when the defendants accepted the transparencies and transmitted them to Germany. The contracts incorporated the terms printed on the delivery notes. The same result followed from the alternative analysis that requests were offers to supply on usual terms, accepted by delivery, and from the established course of dealing.
2. The defendants knew that the claimants supplied transparencies on standard industry terms, including specified loss and holding fees. They never rejected those terms or returned the transparencies. The absence of signed delivery notes did not prevent incorporation because the requested signature principally acknowledged safe receipt.
3. The reasoning in Interfoto Picture Library v Stiletto Visual Programmes Limited [1989] 1 QB 433 was distinguishable. The present terms were not unusual or particularly onerous, were plainly stated, and were known to the defendants. The special notice objection therefore failed.
4. The course of dealing supported incorporation. The reasoning in Hardwick Game Farm v SAPPA [1969] 2 AC 31 and Circle Freight International Limited v Medeast Gulf Exports Limited [1988] 2 Lloyd’s Rep 427 was applicable by analogy.
5. The deliveries were not bare bailments. In a commercial situation where goods are passed by way of business, it would be unusual for no contract to exist.
6. Burda Media acted as agent. The publishing companies had instructed it to obtain transparencies on the usual terms, which were known to them. The agency objection therefore failed.
7. Negotiated reductions in earlier loss-fee claims were specific compromises made for goodwill. They did not imply a promise to waive future entitlement to the full contractual loss fee. The holding-fee claim could not be determined without evidence showing how the fees arose and whether they fell within the parties’ previous course of business.
8. Where a delivery note referred to holding fees but stated no amount, a reasonable sum was implied rather than the term being treated as ineffective.