Dunelm Geotechnical & Environmental Limited v Bray Cranes Limited

Contractual standard terms are incorporated only where the party to be bound receives reasonably sufficient notice before or when the contract is concluded. A descriptive reference to an industry service or contract type does not necessarily identify standard terms as contractual conditions. Incorporation by a course of dealing is fact-sensitive; widely separated and inconsistently documented transactions may be insufficient. An onerous limitation clause requires fair and reasonable notice, although a consequential-loss exclusion in a commercial services contract may not itself be unusual. If incorporated, such a clause may satisfy the reasonableness requirement where the parties have equal bargaining power and the supplier cannot assess the customer’s consequential exposure.

The claimant, a ground investigation company, hired the defendant’s crane and operator to lift drilling equipment onto a pontoon. The lift failed through the defendant’s admitted negligence, causing damage and consequential losses. The claimant sought damages; the defendant counterclaimed the agreed hire charges.

The principal issues were whether the Construction Plant-Hire Association standard terms, including a broad limitation of liability, were incorporated into the contract, whether the limitation clause satisfied Unfair Contract Terms Act 1977, the recoverable losses, and whether the claimant had affirmed the contract after the repudiatory breach.

1. Incorporation. The contract was concluded when the claimant’s purchase order was received. The subsequent preparation of risk assessments and the method statement formed part of the contractual performance, but did not postpone formation or constitute additional express terms.
2. The quotation’s reference to a “CPA Contract Lift” described the service and allocation of operational responsibility. It did not give reasonably sufficient notice that the full CPA standard terms governed the contract. The method statement’s reference to those terms likewise did not incorporate them. The CPA terms supplied on the day before the lift came too late.
3. Incorporation by course of dealing failed. The previous transactions were too few, too remote in time, and documented inconsistently. There was no basis to infer that the claimant understood the 2021 contract to be on the same terms.
4. Alternative UCTA conclusion. Had clause 7.2.2 been incorporated, it would have been reasonable under sections 3 and 11 of the Unfair Contract Terms Act 1977. The parties had equal bargaining power. The clause was not intrinsically surprising for a commercial services contract. The defendant could not know the claimant’s arrangements with the Port of Tyne or the scale of consequential losses, whereas the claimant could assess and insure against that risk.
5. Loss and counterclaim. The claimant affirmed the contract by requesting the defendant to remain on site and prepare recovery documents after the negligent lift. The defendant was therefore entitled to the original two-day hire charges. Recoverable losses included reasonable pontoon, drilling, replacement crane, port, engineering, recovery, welfare and staff costs totalling £134,013.04. Loss of profit was not proved. Judgment was entered for the claimant for £131,253.04 after set-off.