Interfoto Picture Library v Stiletto Visual Programmes
Court of Appeal
Citations:  QB 433;  2 WLR 615;  1 All ER 348; (1987) 137 NLJ 1159; (1988) 132 SJ 460;  CLY 430.
The claimant ran a photo library. On request, they sent the defendant 47 photograph transparencies along with a delivery note. The delivery note contained several contract conditions. This included a stipulation that the transparencies should be returned within 14 days. If they were returned later, the defendant would be liable for a fee of £5 a day (plus VAT) per transparency held.
The defendant had never used the claimant’s services before, and did not read the delivery note. They returned the transparencies late. The claimant charged them the fee (which by then was over £3000). The defendant refused to pay, arguing that the late fee condition was not part of the parties’ contract.
- Was the late fee condition part of the contract?
The Court of Appeal held in favour of the defendant. The claimant had not given the defendant fair and reasonable notice of the late fee clause. Accordingly, it had not been incorporated into their contract. The most the claimant was entitled to was a holding fee based on quantum meruit.
This Case is Authority For…
Where a contract contains an unusual or onerous clause, the party relying on it must show that it was incorporated into the contract. To do this, they must prove that they gave fair and reasonable notice of the clause to the other party.
Bingham LJ noted that what constitutes fair and reasonable notice depends on the circumstances of the case. In particular, ‘the more outlandish the clause the greater the notice which the other party, if he is to be bound, must in all fairness be given’. He described this as being similar to the Civil law notion of good faith, ‘at any rate so far as the formation of the contract is concerned.’
The court clarified that the need to give specific notice of a clause applies to any unusual or onerous contract term. It is not limited to exclusion and limitation clauses.