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Traditionally, when deciding whether a term was present in a contract or not, the courts looked at, and extensively scrutinised, written correspondence. The courts said that only written words were good evidence. However, we have more recently seen a shift towards looking at the intentions of the parties, rather than what is written down. Of course, if the contract was negotiated by experienced businessmen who would understand the implications of a written contract, the courts will still favour the older view.

Incorporation of terms

In order for a term to be binding, it must have been incorporated, or included, into the contract. The landmark case of Interfoto v Stiletto Visual Programmes Ltd [1989] illustrates the issue of incorporation. Here, a 47 slides, sent by request, were to be returned by a certain date. They were returned late due to the defendant forgetting about them. Inside the delivery packet was a piece of paper on which there were 8 terms. One of the terms contained the fee penalties for late return. The defendant refused to pay the £4,000 invoice sent for late return, and the claimant sued. The issue was whether the late fee term was included in the contract. It was found that the contract was formed when the defendants decided to keep the slides, therefore the terms on the paper were generally included. However, the term containing the fees for late return was so unusual that reasonable notice should have been given to the defendant to this effect: in some way, the unusual term should have been highlighted...

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