Henry Kendall Ltd v William Lillico Ltd [1969]

Henry Kendall Ltd v William Lillico Ltd [1969] 2 AC 31 is a significant English contract law case that deals with the incorporation of contract terms through a course of dealings. The central issue revolves around the sale of animal food, its defects, and the responsibilities of the buyer in a long-standing commercial relationship.

The dispute originated from the sale of defective animal food by merchants to a farmer. The chain of suppliers involved multiple layers, creating a complex contractual arrangement. The purchases occurred regularly, approximately three or four times a month, spanning over three years. After each transaction, a sold note was issued, explicitly stating that the buyer assumed responsibility for latent defects. Despite the consistent issuance of sold notes, the buyers claimed they had never read them.

The House of Lords, in its judgment, departed from the stringent requirement of proving actual knowledge, as suggested in Lord Devlin's McCutcheon dicta. Instead, it held that a reasonable seller in such circumstances could reasonably assume that the buyer agreed to the terms. The court rejected the notion that explicit proof of the buyer's awareness was necessary and emphasised the significance of the course of dealings in establishing the incorporation of contractual terms.

The case highlights the importance of a course of dealings in establishing the incorporation of contract terms. The judgment of this case indicates that a reasonable assumption of agreement can be made by a party based on the course of dealings between the parties without the requirement for actual knowledge.

This case contributes to the jurisprudence of contract law by recognising the practical implications of a course of dealings in determining the incorporation of terms. The judgment provides a nuanced perspective on the reasonable expectations of parties involved in long-standing commercial relationships, acknowledging that a consistent course of dealings may imply acceptance of contractual terms, even if not explicitly read or acknowledged by the parties.
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