Vertex Antennentechnik makes and sells
satellite antennae and related equipment. 7E Communications is a
telecoms engineering consultancy based in Surrey. 7E agreed to buy
some equipment from Vertex which it then declared faulty. Before
that dispute could be settled the two parties had to decide in
which jurisdiction it could be fought.
When Vertex faxed 7E an offer to sell the
equipment its quotation said that the sale was offered "according
to our general terms and conditions". No copy of those Ts&Cs
was supplied.
An executive with 7E replied by fax with a new
document, a purchase order, which referenced the sale offer
quotation by name and reference number. Both parties agreed that
the contract between them was concluded when that fax was sent to
and received by Vertex, but the terms of that contract were
disputed.
Vertex claimed that the relevant jurisdiction
should be Germany for any disputes arising from the contract, and
that it should be exclusively Germany. It pointed to a law known as the
Brussels-I Regulation (23-page / 212KB PDF), properly
called the "Council Regulation on Jurisdiction and the Recognition
and Enforcement of Judgments in Civil and Commercial Matters".
"If the parties, one or more of whom is
domiciled in a Member State, have agreed that a court or the courts
of a Member State are to have jurisdiction to settle any disputes
which have arisen or which may arise in connection with a
particular legal relationship, that court or those courts shall
have jurisdiction," says article 23 of the Regulation. "Such
jurisdiction shall be exclusive unless the parties have agreed
otherwise. Such an agreement conferring jurisdiction shall be in
writing or evidenced in writing."
The dispute concerned, then, whether or not
the reference to terms and conditions constituted an agreement in
writing under the Regulation.
Presiding judge Sir Anthony Clarke
MR distinguished 7E's
circumstances from those in a landmark European Court of Justice
(ECJ) case on jurisdiction clauses. That ruling was given in 1976
in a dispute over a German company's sale of upholstering machines
to Italian firm Salotti. The signed contract made no reference to
the terms and conditions which were on the back. The ECJ said the
jurisdiction clause in those terms did not form part of the
contract.
"Where the contract signed by both parties
expressly refers to general conditions which include a clause
conferring jurisdiction, article 17 (now 23) is satisfied," wrote
Sir Anthony. "They do not suggest that the general conditions have
themselves to form part of the contractual document. An express
reference to the general conditions in the contract is enough.
There is no suggestion in those paragraphs that in such
circumstances there must be an express reference, not only to the
general conditions which contain the jurisdiction clause, but also
to the jurisdiction clause itself."
7E also argued that authorities cited by
Vertex could not apply because there were two signed documents, not
one.
"The question is therefore whether the fact
that the parties did not sign one but two documents is a critical
distinction," wrote Sir Anthony. "We have reached the clear
conclusion that it is not. If both parties had signed the original
quotation as evidencing the contract between them, there can be no
doubt that the principles stated above would apply and that the
quotation would be, in the words of the Court of Justice, 'a
writing' evidencing a contract on the terms of the defendant's
terms and conditions, including the German jurisdiction clause, and
that both parties including the claimant would be bound by the
clause, just as Mr Mossler was bound by the clause in [a previous
case involving] Credit Suisse, even though he had not seen and did
not have a copy either of the relevant terms or of the jurisdiction
clause."
"In our judgment, no distinction in principle
is to be drawn between a case in which a contract is contained in
one document signed by both parties and a case in which a contract
is contained in or evidenced by two documents, one of which is
signed by one party and one by the other," said Clarke.
Jon Fell, a partner with Pinsent Masons, the
law firm behind OUT-LAW.COM, described the ruling as pragmatic.
"The court recognised that most people don't read the small print
but it's saying that this is no excuse for a company that was told
that small print existed. 7E should have asked to see the small
print."
Fell added that if a dispute between a company
and a consumer would likely see a different outcome. "A court would
probably bend over backwards to support a consumer's argument that
unseen conditions should not form part of a contract," he said.
