Contract; contents; assent to express terms in signed document.
Facts: Alphapharm imported a flu vaccine into Australia. The vaccine was sensitive to heat and had to be kept within certain temperatures at all times. Alphapharm entered into an agreement with Toll, for Toll to collect the vaccine when it arrived in Australia, store it, and transport it to purchasers, all the while keeping it at proper temperatures. Unfortunately, on various occasions, batches of the vaccine were damaged by temperature changes while in Toll's possession. Alphapharm sued Toll for damages, alleging that Toll, as bailee of the vaccine, had been negligent. In its defence, Toll argued that any such liability was excluded by the provisions of the contract that had been signed. However, the person who had signed the contract for Alphapharm had not read these conditions before signing the contract and claimed not to be bound by them.
Issue: Had the clauses that excluded liability for negligence become terms of the contract even though they had not been read before the agreement was signed?
Decision: The exclusion clauses became terms of the contract.
Reason: The terms of a contract are determined objectively, by taking account of the words and conduct of the contracting parties, and asking what a reasonable person would believe the parties were assenting to. Signing a document known to contain contractual terms would be understood by a reasonable person as an indication that the terms contained in that document are agreed to. The result may be different in exceptional cases, such as where a signature is obtained by fraud, misrepresentation, duress, mistake or some other recognised vitiating factor. In the absence of such factors (or a claim for equitable or statutory relief) a person who signs a document knowing that it contains contractual terms is bound by those terms whether or not they have read them.