One World (GB) Ltd v Elite Mobile Ltd.

A party who signs a contractual document is ordinarily bound by its terms, whether or not the document has been read. The court assumed, without deciding, that an exceptional rule may apply to an unusual or onerous term in a signed document. A 40% connection threshold for payment of mobile-phone SIM-card bonuses was neither unusual nor onerous on the facts. The term was therefore incorporated. Contractual wording must be construed by asking what a reasonable person with the relevant background knowledge would understand it to mean, giving weight to business common sense. An ambiguous reference to a shipment meant the overall shipment forming each order, rather than each parcel or network component. A party obliged to account must provide sufficient information to establish both the amount due and whether contractual conditions have been met.

OneWorld supplied pre-pay mobile-phone SIM cards obtained from Elite. The parties agreed prices and connection bonuses, but disputed whether payment of the bonuses was conditional on achieving a 40% connection threshold.

Elite relied on SIM Card Terms said to have been shown to OneWorld when its director signed a Business Registration Form. OneWorld disputed incorporation and relied on invoice terms which contained no threshold. The court also had to construe the meaning of shipment in the threshold clause and consider the information required for an account. Quantum could not be determined at the hearing.

1. Incorporation. The court applied the principle in L'Estrange v F Graucob Ltd [1934] 2 KB 394. A signature ordinarily incorporates the contractual terms, irrespective of whether they were read. The court assumed, without deciding, that an exception might exist for an unusual or onerous term in a signed document. The authorities, including Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] 1 QB 433 and Do-Buy 925 Ltd v National Westminster [2010] EWHC 2862, did not require a different result.
2. The SIM Card Terms were incorporated by Mr Mughal’s signature. The 40% threshold was neither unusual nor onerous. OneWorld and Elite were commercial entities, Mr Mughal was experienced in SIM-card distribution, and he had represented that he could achieve an 80% activation rate. The absence of a prior oral explanation did not prevent incorporation.
3. The invoice terms were not incorporated merely because they appeared on a later invoice. They were post-contractual and did not address connection bonuses. They did not replace the incorporated threshold term.
4. Construction. Applying the principles in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896, Chartbrook Ltd v Persimmon Homes Ltd [2009] UKHL 38 and Rainy Sky SA v Kookmin Bank [2011] UKSC 50, “shipment” meant the order as a whole. The threshold applied to the overall connection rate for each order. It did not apply separately to each parcel or network, particularly since shipment arrangements were outside OneWorld’s control.
5. Elite was required to provide information sufficient to show the connection bonuses due and whether the threshold had been met for each order. Existing reports were insufficient for that purpose, and further orders might be required to enable the account to be completed.

The SIM Supply Agreement was not incorporated. The SIM Card Terms governed the connection-bonus contracts.