CONTRACT LECTURES
C STRICKLAND
TRANSCRIPT
TOTAL TIME = 52 mins 14 secs
LOOKING AT THE CONTENTS OF THE CONTRACT
LECTURE 8
Track/slide 14 04.37
We can now consider the Grogan case
This case seems to modify the basic rule somewhat.
In this case, Triact were laying pipes in Dollgellau and needed an extra machine plus driver
for the job. Triact’s site agent, with authority, telephoned Robin Meredith Plant Hire and
agreed the hire of a driver plus machine at an all in rate of £14.50 an hour. This was thus a
verbal contract made over the phone.
Each week the driver took his time sheet to the site agent who signed them verifying the
number of hours he had worked. Just above the place for signature were the words, ‘All hire
undertaken under CPA conditions. Copies available on request.’ [CPA stands for
Contractor’s Plant Association]
About 2 weeks later the driver of the machine, Mr Grogan, was involved in an accident and
sued both Triact and Meredith for damages. They agreed to the judgment of Pill J and the
award of damages of nearly £83,000 – Meredith to pay one third and Triact two thirds.
Meredith then claimed that Triact was liable to indemnify it for its one third under the CPA
conditions.
First instance,
Pill J ordered Triact to indemnify Meredith on the basis that the signature of Mr Grogan
effectively ‘varied’ the original telephone contract and incorporated the CPA conditions into
the contract between them. Under these conditions, Triact would be bound to indemnify
Meredith for any liability incurred against third parties. Thus, the trial judge decided the issue
on the strength of the signature on the time sheet. He did NOT rely on any notion that the
conditions were ‘implied’ into the contract due to normal business practice, which quite often
happens, because the use of the CPA conditions was not that well established as a routine
thing.
On Appeal to the Court of Appeal,
Auld LJ stated:
‘I reject Mr Turner’s proposition that the court should look only at the WORDS of a signed
document and disregard its nature or function…The central question is … whether the
document purported to have contractual effect… Documents such as a time sheet, an invoice
or a statement of account… do not normally have a contractual effect in the sense of making
or varying a contract. The purpose of time sheets is not normally to contain or evidence the
‘terms’ of a contract, but to ‘record’ a party’s ‘performance’ of an existing obligation under a
contract.’
His lordship felt that on the evidence the purpose of the time sheet, as understood by
everyone, was merely to keep a record of the number of hours worked by Mr Grogan. He
said that saying that a signature is enough on its own to incorporate terms into a contract was
‘too mechanistic.’
So, you can see that this gives a glimmer of hope for people who sign documents after the
original contract has been made. It is not of wide application though.