British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd [1973]

British Crane Hire Corporation Ltd v Ipswich Plant Hire Ltd [1973] EWCA Civ 6 addressed the issue of whether terms from a printed form could be incorporated into an oral contract based on accepted trade practice.

British Crane Hire Corporation Ltd and Ipswich Plant Hire Ltd were engaged in plant hire businesses and had a history of previous contracts using a printed form. In June 1970, Ipswich Plant urgently needed a crane, and an agreement was reached over the phone for hire and transport charges. Subsequently, British Crane delivered the crane, and a form was provided, which included a term stating that the hirers would be responsible for recovery expenses. However, Ipswich Plant did not sign the form on this occasion. The crane became stuck in marshland, requiring expensive recovery. British Crane argued that the unsigned form, incorporating the recovery cost clause, was part of the oral contract based on their previous dealings.

Lord Denning MR delivered the judgment and began with a concise opening sentence emphasising the key issue: "In June 1970, a big earth-moving machine got stuck in the mud. It sank so far as to be out of sight. It cost much money to get it out. Who is to pay the cost?"

Lord Denning ruled that the clause regarding recovery expenses was incorporated into the contract, and Ipswich Plant was obligated to reimburse for the recovery costs. He distinguished this case from Hollier v Rambler Motors [1972], where it was stated that there was no precedent for implying a term into an oral contract based on a limited course of dealing over several years.

Lord Denning highlighted the crucial differences between the cases. In British Crane Hire Corporation, both parties were commercial entities in the plant-hiring trade and of equal bargaining power. They were aware of industry practices involving the imposition of conditions for hiring plant machinery. The manager of Ipswich Plant acknowledged the existence of such conditions, including an indemnity clause, in the industry. Therefore, Lord Denning emphasised that the conditions on the form should be seen as incorporated into the contract, not solely based on the course of dealing but rather on the common understanding derived from the parties' conduct.

This case underscores the principle that, in the context of regular business dealings between commercial entities, terms from previous transactions may be incorporated into subsequent contracts, provided there is a common understanding between the parties. The decision reflects the importance of industry practices and the awareness of both parties in determining the terms of a contract.