The WA Court of Appeal recently revisited the incorporation of contractual terms through prior dealings in La Rosa v Nudrill Pty Ltd  WASCA 18. The decision indicates that there are no circumstances where a prior course of dealings will automatically incorporate a contractual term; it will always depend on the facts.
McLure P confirmed that:
McLure P indicated that a 'contractual document' in prior dealings cases was a document in which a reasonable person would expect to find contractual terms and also a document which the parties had, by their conduct, accepted or treated as a 'contractual document'. McLure P found that there were two tests for the incorporation of an express term into a contract by way of prior dealings, being:
McLure P then found that actual knowledge of the term sought to be incorporated is not essential under either of the tests above, and that the Brambles test seemed more appropriate in determining whether an express term had been incorporated into a contract in circumstances in which prior dealings were relied on. McLure P ultimately concluded that the exclusion clause was not incorporated into the cartage contract. This conclusion was based on the finding that receipt of the invoices was not:
McLure P supported these findings by noting that the invoices were not a 'contractual document' and were only issued for services already provided and to secure payment for those services. Murphy JA agreed with McLure P.
Buss JA found that Australia had adopted the 'reasonable objective expectation test' in relation to the incorporation of an express term by a prior course of dealings, which examines what each party was reasonably entitled to conclude from the actions or conduct of the other. Buss JA went on to find that it would be a question of fact and degree as to whether parties had incorporated a term into their contract by a previous course of dealings and that a court would have regard to various factors, including the number of prior dealings, how proximate the dealings were to one another and the similarity of the prior dealings to the dealing in question.
Similar to McLure P, Buss JA found that it was not essential to establish that the party sought to be bound by a term had actual knowledge of the term where a previous course of dealings was being relied on to incorporate a contractual term. Buss JA also noted that it is not an essential pre-condition to the incorporation of a term by a previous course of dealings that:
Ultimately, Buss JA also found that La Rosa was not entitled to conclude from Nudrill's conduct that Nudrill had accepted and agreed to be bound by the terms and conditions contained on the invoices, including the exclusion clause. Buss JA supported this conclusion by noting:
The decision reinforces the need for businesses to carefully examine documents that are frequently provided in an ongoing relationship which could be considered 'contractual documents' and is illustrative of the benefits of expressly making it known that a contract is subject to a term at the time of entering into the contract, as doing so should eliminate any leeway for the party sought to be bound to contend that it was unaware of the term.
These principles are particularly relevant in operational or procurement contexts, where businesses may allow more informality in their contractual arrangements.
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