Ocean Chemical Transport Inc v Exnor Craggs - 2000

Ocean Chemical Transport Inc v Exnor Craggs Ltd [2000] 1 All ER (Comm) 519

Whether time bar was successfully incorporated into contract; unfair terms

Facts

Exnor Craggs (EC) supplied Ocean Chemical Transport (OCT) with bunkers for use on a ship. EC’s terms referred to separate conditions which contained a clause stating a time limit of six months for notification of claims arising for breach of contract. Seventeen months later, the ship was arrested in Egypt by a company claiming they had not been paid for the bunkers. The ship was released after a large security bond was paid. OCT brought an action against EC.

Issues

OCT claimed EC had breached the implied term to provide quiet and unencumbered possession of the bunkers contrary to s12 Sale of Goods Act 1972. They argued the purported time bar was an onerous term and, as such, had not been effectively incorporated into the contract, because EC had not taken sufficient steps to bring it to their notice. They also argued the clause would be excluded by s6 Unfair Contract Terms Act 1977. EC contended the conditions had been sent to OCT and they had explicitly acknowledged receipt of them. The time bar had, therefore, been successfully incorporated into the contract and they sought to rely on it in defence of the claim. EC asserted the time bar clause was the industry norm, and was not an unusual or onerous term. EC argued the 1977 Act would not apply because as an international supply contract, it was excluded under s26.

Decision/Outcome

OCT’s claim was unsuccessful. EC had discharged their duty to bring the terms of the contract to OCT’s attention, particularly given OCT’s express acknowledgement of receipt. The term was an industry norm and was not of an unduly onerous or unusual nature, and s26 effectively excluded the operation of the 1977 Act.