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	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Montgomery Litho Ltd v Maxwell [1999] ScotCS 246 (21 October 1999) URL: http://www.bailii.org/scot/cases/ScotCS/1999/246.html Cite as: [1999] ScotCS 246

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In or about February 1997 the pursuers and respondents contracted with a company Newtext Composition Limited ("Newtext") for the supply of printing services by the respondents to Newtext. It appears that this contract was not reduced to writing. The total cost of the printing services was £5,245 and payment has not been made. This is the sum sued for in the action. No attempt was made to recover this sum from Newtext as that company is now in liquidation. The defender and appellant was a Director of Newtext. The respondents' pleadings are in the following terms:

The sheriff held that the contract was between the two limited companies. Even if the defender should have known about the terms and conditions and should have read them, she was unable to see how, having regard to the way in which the document bears to be signed, namely as managing director for Newtext, it could be said that the defender was signing the form in two capacities and thus making himself personally a party to the contract. She did not accept that a condition making the defender personally responsible for the payment under the contract could be incorporated in this way. In these circumstances she dismissed the action. The sheriff principal, however, took the view that despite the fact that the pursuers' pleadings were deficient, misleading and had led to an error of approach, there was sufficient in the pleadings to entitle the pursuers to a proof before answer. He saw no reason why, as a matter of principle, it should not be possible for a director making an application for credit facilities simultaneously to offer in a personal capacity to guarantee the applicant's liability. He considered that the credit application form in effect constituted two offers, namely an offer on behalf of Newtext to trade according to the pursuers' standard terms and conditions and an offer by the defender to underwrite Newtext's liabilities.

Before this court, counsel for the appellant maintained that the sheriff principal had erred in his analysis of the documentation. The suggestion that the application form amounted to two offers, one on the part of Newtext and the other by the defender himself as an individual, bore no resemblance to the pursuers' pleadings. Her second point was that the sheriff principal's analysis failed to take into account the capacity of the person signing the form and a lack of intention to enter into a personal guarantee which is essential to validity. In relation to the pleading point her argument was that the pursuers' pleadings made it perfectly clear that the credit application form was part of the pursuers' contract with Newtext. While condition 7(e) says that the director responsible for opening a credit account will be jointly and severally liable for all payments due, that is simply a term or condition in the contract as between the pursuers and Newtext. A term or condition in a contract between A and B cannot, by itself, constitute or create an obligation on the part of C. There is nothing in the pursuers' pleadings to indicate that the defender signed the application form in an individual capacity as opposed to signing it in his capacity as Managing Director of Newtext. If the pursuers' argument is to be, as the sheriff principal thought, that there were two offers contained in the application form, one of which was an offer by the defender as an individual, then this should have been spelled out in the pleadings in order to give the defender the opportunity of making his position clear. Counsel for the pursuers and respondents accepted that the pursuers' averments were apt to mislead and gave no hint of a cautionary obligation. He accepted also that the conditions on their own could not create an obligation as against a third party. The creation of that obligation, in counsel's submission, was based purely on the defender's signature to the form immediately after the words "I have read and accepted the company's standard terms and conditions". Had it been necessary to decide this question on the pleadings we would have been inclined to take the view that the pursuers' pleadings were so defective that they would not be entitled to an inquiry. There is nothing in the pursuers' pleadings to indicate that the defender was supposed to be signing in a dual capacity and that, in our view, would be fatal to the pursuers' case. However it is not necessary to decide this case on the rather unsatisfactory basis of defective pleadings as we are satisfied that even if all appropriate averments had been made the action would still fall to be dismissed because of the appellant's second submission to which we now turn.

The second submission was based on the proposition that there was nothing in the credit application form to indicate that the person signing it was doing anything other than applying for credit on behalf of Newtext, and nothing to indicate that there was anything special or unusual in the terms and conditions referable to that contract. Whatever terms and conditions there might be in a contract between two companies, the acceptance by a third party of a personal cautionary obligation is not such a term or condition. In such circumstances it is not sufficient to draw attention generally to standard terms and conditions, but it is necessary to draw specific attention to any unusual or special condition which might be regarded as something more than the normal ancillary terms of a contract. In Interfoto Picture Library Limited v. Stiletto Visual Programmes Limited 1989 1 Q.B. 433 it was held that where clauses incorporated into a contract contained a particularly onerous or unusual condition, the party seeking to enforce that condition had to show that it had been brought fairly and reasonably to the attention of the other party. It was pointed out that it was notorious that people hardly ever troubled to read printed conditions on a ticket or delivery note or similar document. In the older ticket cases the courts held that the common law required that reasonable steps be taken to draw the other party's attention to the printed conditions or they would not be part of the contract. Dillon L.J. said that a logical development of the common law into modern conditions is that it should be held that if one condition in a set of printed conditions is particularly onerous or unusual the party seeking to enforce it must show that that particular condition was brought fairly to the attention of the other party. Bingham L.J., as he then was, said that the well-known cases on sufficiency of notice are concerned, at one level, with a question of pure contractual analysis, but at another level are concerned with a somewhat different question, namely whether it would in all the circumstances be fair or reasonable to hold a party bound by any conditions or by a particular condition of an unusual and stringent nature. Having reviewed some of the authorities he came to the conclusion that on the facts of that particular case the condition in question was of a particularly onerous nature which should specifically have been drawn to the attention of the other party and that the failure to do so relieved the defendants from liability under that condition. Amongst the authorities founded on by Bingham L.J. were two Scottish cases Hood v. Anchor Line Limited [1918] AC 837 (1918 SC (HL) 143) and McCutcheon v. David McBrayne Limited [1964] 1 WLR 125 (1964 SC (HL) 28). Although the analysis of Dillon L.J. appear to show some differences inter se, we see no reason to doubt that the general principle upon which they both proceeded, viz. that the failure by the proferens fairly to draw attention to a particularly onerous and unusual provision may disable him from effectually founding on it, represents also the law of Scotland. Counsel for the respondents maintained that cases such as Interfoto and other ticket cases were not in point because in the present case the defender had signed the application form which contained the statement "I have read and accepted the company's standard terms and conditions". In our view, however, the addition of this statement adds nothing to what is normally found in offers or acceptances, namely a statement that the offer or acceptance is to be governed by the standard terms and conditions of the proferens. The point is not whether the standard terms and conditions which may be voluminous have been read in whole or in part by one of the parties. The question really is whether a particular condition is of such an