Road Transport: Has your customer agreed to your conditions of carriage? The legal obstacles faced by carriers seeking to rely on a ‘course of dealings’

Every road transport operator in Australia would be familiar with the use of conditions of carriage to attempt to exclude liability for loss of or damage to goods being carried. It is often impractical or inconvenient to have customers sign the fine print conditions on the reverse of consignment notes before accepting goods for carriage.

A recent decision in La Rosa v Nudrill Pty Ltd [2013] WASCA 18 of the Western Australia Court of Appeal emphasises the uphill battle faced by carriers seeking to argue, in the absence of signed conditions, that its customer nevertheless must be taken to have agreed with the conditions because of a ‘course of dealings’ between them.

Facts

Mr La Rosa contracted with Nudrill Pty Ltd (Nudrill) to transport a drill rig. During transportation, the drill slipped off the back of La Rosa’s trailer. Nudrill sued La Rosa for damages, arguing that that La Rosa’s negligent driving caused the accident.

La Rosa claimed the contract of carriage between himself and Nudrill included an exclusion clause that provided La Rosa was not liable for negligence or breach of contract. The exclusion clause was one of a series of conditions printed on the reverse of tax invoices La Rosa delivered following completion of each job. However these conditions were never discussed between the parties or expressly agreed to by Nudrill. Further La Rosa could not demonstrate that a representative of Nudrill had actual knowledge of the existence of the conditions or the exclusion clause.

La Rosa argued that Nudrill was a long-standing client and that his businesses had contracted with Nudrill on 27 prior occasions. After each delivery, Nudrill had been sent a tax invoice with La Rosa’s terms, including the exclusion clause, printed on the reverse. La Rosa therefore contended that Nudrill must been taken to have agreed to contract with him based on those terms.

Decision

The court found that:

1. A tax invoice issued after a contract is performed is not a ‘contractual document’ but a request for payment for services already supplied. Receipt of a tax invoice is not sufficient to justify an inference of an acceptance of terms of conditions printed on the invoice even if the same form of tax invoice has been repeatedly received.
2. La Rosa was not entitled to conclude from the actions or conduct of Nudrill that Nudrill accepted and agreed to be bound by the printed exclusion clause on the reverse of the invoices.
3. The invoices were sent to Nudrill after the contract had been performed, and in the circumstances, a reasonable person would have been entitled to regard the invoices as nothing more than a request for payment.

Lessons

A carrier is not entitled to conclude from the actions or conduct of its customer that the customer has accepted and agreed to be bound by printed conditions on a tax invoice delivered after performance of the contract.

Carriers should ensure that their conditions of carriage are contained in a contractual document, such as a consignment note or quotation, and are signed or otherwise acknowledged by customers before the carrier transports goods. The safest course of action is for carriers to have a single written contract with their customers that applies to all transport services provided by the carrier.

If you would like more information on these issues, please contact Gillian Bristow or Terry Batch on +61 7 3231 2444.