First Principles of Business Law

3.7. Inclusion of onerous and unusual terms

Read the facts and the question and then choose the best answer.

A is an equipment-hire company. B pays $30 to hire a chainsaw to cut down a dead tree. When B collects the chainsaw, A gives him a delivery note. On the note it is printed that the chainsaw must be returned within 3 days. It is also written in smaller print on the note that the hirer is liable to pay $200 per day for late returns. B does not read the note and A does not draw B's attention to what is written on it.

Is B bound by the term to pay $200 per day if he returns the chainsaw late?

(a) Yes. The delivery note is a document that would be expected to contain contractual terms, so even if B chooses not to read the terms, he is still bound by them.

(b) No. Even though the delivery note is a document that would be expected to contain contractual terms, the term in question is unusually harsh. It would need to be pointed out to B before it becomes part of the contract.