High Court Refuses To Incorporate "Cunningly Concealed" Terms And Conditions

• Published date: 18 October 2021
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Media, Telecoms, IT, Entertainment, Contracts and Commercial Law, Mobile & Cable Communications, Trials & Appeals & Compensation
• Law Firm: Shepherd and Wedderburn LLP
• Author: Mr Alison Rochester and Roddy Forgie

In Blu-Sky Solutions Ltd v Be Caring Ltd [2021] EWHC 2619 (Comm) the High Court in England held that a supplier's standard terms and conditions ("T&Cs") are incorporated into a contract by reference if the contract provides that, upon signing the contract, the customer accepts that it has reviewed and agreed to the relevant T&Cs. However, any unduly onerous provisions in the T&Cs must be clearly drawn to the customer's attention before signing, or they will not be incorporated.

Formation of the contract

Be Caring Ltd (the customer) entered into a telecoms contract with Blu-Sky Solutions Ltd (the supplier) by electronically signing an online purchase order. The order included a link to the supplier's T&Cs on its website and contained the following text:

"...by signing this document I agree I have logged on to the [supplier's] website at [weblink], have read agree and fully understand all terms and conditions regarding the contract and the policy protection scheme & free trial (*where applicable) and am bound by the same."

The customer signed the contract, despite not having read the supplier's T&Cs. When the customer subsequently attempted to cancel the contract, the supplier charged the customer an early cancellation fee of '180,000 (plus VAT) in line with the early cancellation provision in the T&Cs. The customer refused to pay and argued that the T&Cs were not incorporated by reference.

'Cunningly concealed' early cancellation fee

The High Court held that the majority of the T&Cs were incorporated into the contract when the customer signed and returned the purchase order to the supplier. The court found it irrelevant that the customer did not actually review the T&Cs, as the T&Cs were easily accessible on the supplier's website and could be accessed through a hyperlink from the contract itself. Therefore, signing the contract was enough to bind the customer to the T&Cs.

However, the court refused...