Scotbeef Limited v D&S Storage Limited (in liquidation)

Standard terms are incorporated only where they are contractual terms and the party relying on them has given reasonable notice in the circumstances. Reference to trade-association terms may suffice where the terms are genuinely standard or usual, are identified, and are reasonably available. A payment invoice signed for internal accounting purposes is not necessarily a contractual document. Time-bar and liability-limitation clauses must be considered individually for onerousness and reasonableness. A clause requiring proceedings within nine months ran separately for each pallet from the date of actual or due-diligence awareness of damage. The FSDF terms were not incorporated, but the relevant time-limit and notice provisions were not unreasonable under the Unfair Contract Terms Act 1977.

Scotbeef claimed damages after meat stored by D&S Storage was found to be contaminated and destroyed. D&S relied on Food Storage & Distribution Federation terms, referred to on some invoices, including notice requirements, a nine-month time bar, and liability limits. The parties had no written storage contract. The preliminary issues concerned whether the FSDF terms were incorporated by variation, telephone notice, signature of invoices, reference on invoices, or course of dealing, and whether the relevant clauses were unreasonable under the Unfair Contract Terms Act 1977.

The FSDF terms were not incorporated into the contract, and Scotbeef’s claim was therefore neither time-barred nor subject to the FSDF liability limits.

1. The Defendant failed to establish that the FSDF terms were standard terms used in the industry. The evidence consisted principally of an untested assertion that they were the industry “Bible”; the terms also differed materially from the previously used UKWA terms.

2. The alleged telephone notifications were not proved. The Defendant’s evidence was hearsay, unsupported by documents, and contradicted by the more reliable evidence of Scotbeef’s witnesses.

3. Signing the invoices did not incorporate the terms. The signatures authorised internal payment and did not signify assent to a contractual document. The invoices operated as statements of account.

4. The wording “A Member of FSDF FSDF Terms and Conditions Apply” gave insufficient notice. The terms were not supplied, identified as available on request, linked to a website, or printed on the invoices. The prominence of the 30-day payment wording suggested that payment was the principal relevant term.

5. If incorporated, clause 11.10 would run separately for each pallet from the date on which Scotbeef became aware, or would have become aware through reasonable diligence, of damage. It would not run for all pallets from the date on which six pallets were discovered. Any ambiguity would be construed in Scotbeef’s favour.

6. The relevant notice and time-bar clauses were not onerous in the circumstances. Nor were they unreasonable under section 11 of the Unfair Contract Terms Act 1977, assessed at the time of contracting. The parties had broadly equal bargaining power, the clauses were usual in the industry, and compliance was practicable.

The preliminary issues were answered accordingly.