British Crane v Ipswich Plant - 1975

British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd [1975] QB 303

Oral contract for hire of a crane; whether normal trade conditions incorporated into contract

Facts

Ipswich Plant Hire (IPH) arranged by telephone to hire a crane from British Crane Hire Corporation (BCHC). The crane was duly delivered, and subsequently BCHC sent their conditions of hire to IPH. The conditions included a clause stipulating that IPH would be responsible for, and indemnify BCHC for, any costs arising out of the use of the crane. IPH did not sign or return the form to BCHC and when the crane sank into the marshes, they refused to indemnify BCHC for the cost of recovering it.

Issues

IPH contended the clause requiring them to indemnify BCHC had not been successfully incorporated into the contract because the conditions of hire had not been supplied until after the contract had been formed. They argued the contract was formed orally over the telephone and BCHC could not, therefore, seek to incorporate terms into the agreement after the crane had been delivered. IPH also relied on their failure to sign and return the form as evidence that these additional terms had not been agreed. BCHC argued IPH had hired cranes from them on previous occasions and were aware of their conditions of hire and, as such, these conditions were effectively incorporated into the contract. They also contended such conditions were the industry norm and, therefore, it was not incumbent upon them to draw special attention to the clause.

Decision/Outcome

BCHC were successful and the clause was deemed to be incorporated into the contract. Where parties are of equal commercial bargaining power, the conditions usually contained within industry contracts would be successfully incorporated based on the common understanding of the parties. BCHC could, therefore, recover the costs of recovering the crane.