English Judge strikes down onerous clause in B2B contract

By Nichola Evans and Melissa Munday, Ward Hadaway

Commercial entities frequently seek to incorporate their T&Cs into B2B contracts by reference to webpages. However, the recent High Court decision, Blu-Sky Solutions Ltd v Be Caring Ltd [2021], has highlighted the potential pitfalls of this approach and demonstrates English courts will intervene even in B2B contracts if they consider that onerous clauses are not reasonably brought to the attention of the other party.

This case suggests a distinction between including an onerous term in the signed contract itself, and merely including it in T&Cs, which are located elsewhere and incorporated by reference. Although only a first instance decision, it is a case of some significance.

The usual principle is that a person who signs a document is bound by its terms (including those incorporated by reference) whether or not they have read them. There have always been exceptional cases where the signature can be set aside, i.e. signature procured by fraud, undue influence, duress, or the like, but these operate within a narrow compass.

Where there are standard T&Cs, a condition which is particularly onerous or unusual will not be incorporated into the contract, unless the party relying on it has fairly and reasonably brought it to the other party’s attention. This case considered to what degree that principle applies where the T&Cs are incorporated under a signed contract and how it fits with the usual principle that a person who signs a document is bound by its terms (including those incorporated by reference) whether or not they have read them.

The claimant sought to recover a cancellation fee. The fee was found in the claimant’s T&Cs, which were referred to in an order form.

The defendant, by e-signing the order form, acknowledged that it had accessed and read the T&Cs on their website. While the court held the terms were reasonably clearly brought to the purchaser’s attention in the order form, the cancellation clause was not. The T&Cs comprised just over a page of text in closely spaced small type, and the relevant cancellation clause was “cunningly concealed in the middle of a dense thicket”.

Interestingly, the Judge suggested a sliding-scale approach. The weight given to a party’s signature was likely to be relatively weak if the term is buried away in detailed T&Cs that are incorporated as matter of law, but which are neither found in nor provided with the signed contract.

Key takeaways

  • Care will be needed if drafting a contract that is subject to English law regarding the method used to communicate T&Cs to the other party to ensure all terms, particularly those which are onerous, are incorporated into the contract.
  • Even a contract consisting of single signed document may be interrogated by the Court to determine what terms have been incorporated.

Nichola Evans

Nichola Evans

GGI member firm
Ward Hadaway
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Newcastle upon Tyne, Leeds, Manchester, UK
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Ward Hadaway is one of the largest fullservice law firms in the North of England, with a reputation for quality, innovation and a practical approach to meeting their clients’ needs. With 90+ partners and over 450 staff, the firm’s approach of partner-led relationships with all clients is supported by a resource that has real strength in depth.

Nichola Evans is a Partner | Commercial Litigation with Ward Hadaway. Nichola specialises in high value contract claims and has operated in a number of sectors most notably insurance, public sector and health sector. She is known for her commercial, pragmatic approach and has considerable experience of Alternative Dispute Resolution, in all its forms. Nichola is also a CMC Registered Mediator.
Melissa Munday

Melissa Munday

GGI member firm
Ward Hadaway
Law Firm Services
Newcastle upon Tyne, Leeds, Manchester, UK
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Melissa Munday is a Managing Associate in Ward Hadaway’s Commercial Litigation team. She works in general commercial dispute resolution, has over 20 year’s experience in her particular specialism of commercial, marine and insurance litigation and holds a Masters in Legal Aspects of Marine Affairs and Commercial Law from Cardiff University.


Published: Litigation & Dispute Resolution Newsletter, No. 16, Summer 2022 l Photo: Debu55y - stock.adobe.com

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