Are All the Terms in Your Standard Terms and Conditions Incorporated?

December 2, 2021

A recent High Court decision in the case of Blu-Sky Solutions Limited (“Blu-Sky”) v Be Caring Limited (“BCL”) has put terms and conditions into the spotlight. The case has highlighted the importance of making sure that any onerous terms in your standard terms and conditions are clearly brought to the attention of the other party if you want to rely on the term. In this case, Blu-Sky sued BCL, a social care provider, for cancellation charges (£180,000 plus VAT) under a contract relating to the supply of a mobile network service following the cancellation of an order form by BCL.

The contract between the parties consisted of an order form that attempted to include Blu-Sky’s standard terms of conditions by stating that all orders and contracts were subject to and incorporated their terms and conditions. By signing the order form, you agreed to have gone onto Blu-Sky’s website, to have read and understood the terms, and agreed to be bound by them.

The terms and conditions consisted of just over one page of text in closely spaced small type, and the relevant cancellation clause was ‘hidden away in the middle’. The Judge considered that the terms were not user-friendly to any reader, let alone a non-legal reader.

The High Court decided that whilst the terms and conditions were incorporated into the contract, the cancellation clause was not and so Blu-Sky could not recover the cancellation charges.

Practical Tips

In light of this judgment, here are some practical tips for making sure that any onerous clauses in your terms and conditions are incorporated:

  1. Give a warning. If your standard terms and conditions impose an onerous condition on the other party (e.g. cancellation charges, limitation of liability etc.), you need to explain the purpose of terms and conditions and/or give a warning that the terms impose a substantial obligation on that party (and give brief details). It is not enough to just refer the party to the terms and conditions, you need to actually bring the onerous clause to their attention to make sure they understand its implications. Our top tip is to make sure that the relevant clause is prominently positioned in the terms and conditions as opposed to being buried in the middle.

  2. Use simple language. Make sure your terms and conditions are reasonably easy to read, especially if you know you will be dealing with non-legal readers.

  3. Make it clear what terms apply. If directing a party to terms and conditions that are listed on your website but your website refers to multiple different terms and conditions, it is important to make it clear at the start of each set of terms and conditions what services they relate to; it should be obvious which terms and conditions are applicable to the contract.

  4. Don’t forget to date! Always date your terms and conditions with the following dates (i) when they were produced, and (ii) when they were uploaded onto your website.

  5. Send with the contract. Where the terms and conditions are fairly short (e.g. one page), best practice is to provide them to the other party along with the relevant order form or contract. There is no need to send the other party on a wild goose chase searching on your website for the right terms when actually it makes more sense to just provide them with a copy. This emphasises that they contain an important obligation and need to be read!

Blu-Sky Solutions Limited v Be Caring Limited [2021] EWHC 2619 (Comm)

© Copyright 2022 Squire Patton Boggs (US) LLP
National Law Review, Volume XI, Number 336
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