[Contract] Case study of Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd

Full citation: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52, (2004) 219 CLR 165, 79 ALJR 129

Case relevant to: Terms; Intention to be bound; Unreasonable clause

Facts:

The appellant was in the business of transporting goods. The third respondent wished to engage the services of the appellant. To this end the operations manager of the third respondent signed the appellant's standard ‘Application for Credit’ form below the words: ‘Please read ‘Conditions of Contract’ (Overleaf) prior to signing’. These conditions included a clause excluding the appellant from any liability in respect of goods damaged during transportation. It was not in dispute that the operations manager did not read the conditions of contract or that those conditions were not otherwise mentioned to him by the appellant.



Held: (allowing the appeal) (by the court)
  1. The starting point to the question of whether one person authorised another to do an act or series of acts on their behalf is best answered by considering in whose benefit or in whose interest it was intended it should be done. In the present case, the New Zealand company agreed with the appellant upon rates to be charged for the appellant's services but the Australian company and the distributor received the benefit, and bore the cost, of those services.
  2. In circumstances where the carriage of the medical supplies was to take place pursuant to a contract and rates of freight and terms of payment had to be agreed by someone, the conclusion that the distributor authorised the New Zealand company to contract with the appellant on their behalf was compelling. Further, the terms and conditions entered into by the New Zealand company with the appellant were the appellant's standard terms and conditions so there could be no suggestion that the New Zealand company was acting outside its authority.
  3. Accordingly, the New Zealand company was acting as the agent for the distributor and the distributor was bound by the contract and the exclusion clause.

Comments

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