Grogan v Robin Meredith Plant Hire
Court of Appeal
Citations: [1996] CLC 1127; [1996] CLY 1132.
Facts
The defendant was a plant hire company. They approached a civil engineering company called Triact for work. The parties agreed orally that Triact would hire some of the defendant’s employees for a fee. No other terms were mentioned.
After those employees had worked for two weeks, Triact’s site manager signed a time sheet which the defendant drew up. At the bottom of the sheet was a set of contract terms. This included a term requiring Triact to indemnify the defendant against any liability incurred in the course of the hire (the indemnity clause). The site manager did not read the terms.
The claimant was injured by one of Triact’s machines. They sued both Triact and the defendant for damages. The defendant was judged liable for 2/3rds of the compensation, while Triact was liable for the remaining 1/3rd. The defendant sought to enforce the clause requiring Triact to indemnify them for their 2/3rds liability. They argued that the clause had been incorporated into the contract when Triact’s site manager signed the time sheet.
Issue(s)
- Was the indemnity clause incorporated into the parties’ contract by the site manager’s signature?
Decision
The Court held in favour of Triact. The time sheet was not the kind of document which a reasonable person would anticipate contained contractual terms. As such, the terms within it were not incorporated into the parties’ contract. Triact was therefore not bound to indemnify the defendant.
This Case is Authority For…
Terms in a signed document are not contractually binding unless the signatory knew the document contains contract terms, or a reasonable person would expect it to contain contract terms. This is assessed by reference to the document’s nature and purpose, the circumstances of its use and what the parties understood its purpose to be.
Other
Auld LJ noted that a document can have a contractual purpose without having the effect of making or varying a contract. For example, a time sheet has the contractual purpose of ensuring that one party is performing the work. However, a reasonable person would not expect it to evidence or contain contract terms.
