British Crane Hire v Ipswich Plant Hire [1973] EWCA Civ 6 (13 November 1973)

A dragline crane hired urgently by the defendants sank into marshy ground without fault from either party. The Court of Appeal held that standard trade conditions were incorporated into the oral contract due to both parties' knowledge of such conditions in the plant hire trade, making the hirer liable for recovery costs.

Facts

The defendants, Ipswich Plant Hire Limited, urgently needed a dragline crane for drainage works on marshy land near the River Stour. They hired one from the plaintiffs, British Crane Hire Corporation Limited, by telephone on a Friday for delivery on Sunday. No written terms were agreed at the time of hiring. The plaintiffs subsequently sent their standard printed conditions, but these were never signed by the defendants.

Two mishaps occurred. The first mishap was caused by the plaintiffs’ driver proceeding without waiting for ‘navimats’ (timber baulks for travelling over soft ground), causing the crane to sink. The second mishap occurred the following day when, despite using navimats, the crane sank into the marsh while making a turning movement. The judge found the second mishap was not caused by negligence on either party’s part.

Issues

Primary Issue

Whether the plaintiffs’ standard printed conditions were incorporated into the oral contract of hire, particularly conditions placing responsibility on the hirer for recovery of the crane from soft ground.

Secondary Issue

Whether there was an implied term requiring the hirer to return the hired chattel to the owner.

Judgment

The Court of Appeal dismissed the appeal and held that the printed conditions were incorporated into the contract. Lord Denning MR emphasised that both parties were in the plant hire trade, of equal bargaining power, and both knew that conditions were habitually imposed in such transactions. The defendants’ own manager acknowledged awareness of such conditions and that his company used similar terms when hiring out their own equipment.

Lord Denning MR stated that he would not put the decision so much on course of dealing, but rather on the common understanding derived from the conduct of the parties that the hiring was on the plaintiffs’ usual conditions. He noted that when the defendants requested the crane urgently and it was supplied before the usual form was received, the plaintiffs were entitled to conclude the defendants accepted it on the plaintiffs’ printed conditions.

Sir Eric Sachs agreed, noting the business realities: if the defendants had suggested the plaintiffs bear the risk of the machine sinking, the plaintiffs would have refused to supply the machine. Both parties knew contracts of this type were normally subject to printed conditions.

Legal Principles

The case established important principles regarding incorporation of terms:

• Where both parties are in the same trade and of equal bargaining power, standard trade conditions may be incorporated even without express agreement
• Common understanding derived from trade practice can incorporate terms into oral contracts
• The test is what each party was reasonably entitled to conclude from the attitude of the other
• Clear words are required to exempt a party from responsibility for their own servant’s negligence

Implications

This case extended the circumstances in which terms can be incorporated into contracts beyond strict course of dealing requirements. It established that in commercial contexts between parties of equal bargaining power in the same trade, knowledge of standard industry conditions may suffice for incorporation. The decision distinguishes commercial parties from consumers, preserving protection for the latter whilst recognising commercial reality in trade dealings.

Verdict: Appeal dismissed. The Court of Appeal held that the plaintiffs’ standard conditions were incorporated into the contract. Under Conditions 6 and 8, the defendants were liable for the cost of recovering the crane from the marsh in respect of the second mishap. The plaintiffs bore the cost of the first mishap caused by their own driver’s negligence. The cross-appeal was also dismissed.

Source: British Crane Hire v Ipswich Plant Hire [1973] EWCA Civ 6 (13 November 1973)