The High Court has ruled that neither Noreside Construction Limited’s purchase order conditions nor Irish Asphalt Limited’s standard terms formed part of their aggregate supply contract for a construction project in Finglas, Dublin.
The decision, delivered by Ms Justice Finlay Geoghegan on 4 October 2011, addressed the first issue in a modular trial: the express and implied terms of the parties’ contract. It did not decide whether the supplied aggregate was defective or determine the plaintiff’s claim for damages.
Noreside had been awarded a Dublin City Council contract in 2003 to build 52 houses and 31 senior citizen units at Griffith Avenue. After negotiations, the companies agreed prices for four types of stone, 60-day credit and a price fixed for the duration of the project. The judge found that they reached an oral agreement on 26 March 2003, later recorded in a faxed purchase order.
The purchase order conditions, printed on its reverse, were not brought to Irish Asphalt’s attention before the agreement was concluded. Irish Asphalt had likewise not drawn its own terms to Noreside’s attention by then. The judge could not determine whether the original purchase order arrived at the quarry on 27 or 28 March, but said that timing did not affect her conclusions.
Irish Asphalt argued that references to its terms on delivery dockets, signed for individual loads, incorporated those terms into the supply arrangements. The judge found the dockets recorded the type and quantity of material delivered for checking and payment; they did not make or vary the agreement. The people signing them had no authority to negotiate different supply terms. Deliveries were made under the terms agreed by senior management for the duration of the project.
The judge also rejected Irish Asphalt’s argument that industry custom implied a limit on liability for defective product. She found the evidence showed a practice among some larger quarry owners of including replacement-only or consequential-loss limits in their written conditions, but did not establish a sufficiently well-known custom to imply such a limit when the contract contained no express term to that effect.
The court held that the contract included an implied condition under the Sale of Goods Act 1893, as amended, that the goods be of merchantable quality. Whether the aggregate supplied met that condition was left for the full hearing of Noreside’s claim.
The judge proposed declarations reflecting those conclusions, including that neither company’s standard conditions applied. She said she would hear counsel on the final form of the order. The judgment therefore resolved the contractual-terms issue, while other questions in the proceedings remained for later determination.