| Date | 26 September 1996 |
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| Judgment | Michael Joseph Grogan -v- Robert Meredith Plant Hire and Triact Civil Engineering. CA 9 February 1996 |
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| The Issue | Whether a timesheet can be imputed to contain contract conditions in variation to the prior contract agreement. |
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| Implication |
A timesheet does not normally carry contractual effect in the sense of identifying contractual obligations between the parties. |
printThe interesting question of whether a signed timesheet can vary the conditions of a contract previously entered into was recently studied in the Court of Appeal decision of Michael Joseph Grogan -v- Robin Meredith and Triact Civil Engineering. In early 1992 Triact agreed on the telephone that they would hire from Meredith a driver and an excavating machine for an all-in rate of £ 14.50 an hour. Neither mentioned any other terms. In particular, neither suggested that the agreement should be governed by standard conditions such as those of the Contractor's Plant Association (CPA) commonly used for such contracts. At the end of the first week of hiring, and again after the second week, Meredith's driver presented to Triact, for checking and signature, a driver's timesheet recording the hours he had worked. The sheet had printed on it towards the bottom and just above the place for signature the words "all hire undertaken under CPA Conditions, copies available on request". If these conditions were part of the contract between Triact and Meredith, Triact, as hirer, would be bound to indemnify Meredith against any liability incurred to third parties in the course of the hire. During the third week of hire the machine was involved in an accident causing personal injury to Mr Grogan. In proceedings against both Meredith and Triact claiming damages for his personal injury, Mr Grogan obtained judgment in the sum of approximately £ 82,000 whereby Meredith were to pay one third and Triact two thirds. Meredith sought to recover their one third contribution from Triact on the basis that Triact were liable to indemnify Meredith in accordance with the CPA standard conditions. In this action, at first instance, Meredith succeeded in the High Court, it being held that the signature of the timesheets on the previous two Fridays had varied the plant hire agreement so as to incorporate into it by reference the disputed standard CPA conditions. The judge had held that there had been a variation and Meredith was therefore entitled to succeed in its claim against Triact for an indemnity. He said: "The extent to which the CPA conditions are used in contracts of plant hire and the ease and informality with which, on the evidence, they are incorporated, in my judgment supports Meredith's contention that they were incorporated in this case, by virtue of signatures by Triact's responsible employee upon driver timesheets, which included the statement that all hire was undertaken under the CPA conditions." This decision, not surprisingly, was taken to appeal. Triact argued that where, as here, there is a binding contract not incorporating standard trading terms already in existence, and it is being performed, the court should not conclude that the parties intended to vary the contract to include such terms, unless the words or conduct said to give rise to such variations clearly have that effect. They argued that the proffering of timesheets by Meredith's driver could not have been clearly understood by Triact as an offer to vary, nor could Triact's signing of them have been taken by Meredith as an acceptance of such offer. Triact said that the timesheets were merely statements of the hours worked to secure proper payment and that their signature on the timesheets represented no more than confirmation of their accuracy. The Court of Appeal considered that the central question was whether the timesheet in this case came within the class of a document to which the party receiving it knew contained, or which a reasonable man would expect to contain, relevant contractual conditions. In other words, whether the document purported to have contractual effect. They went on to consider that a timesheet for work done under an existing contract does not in the ordinary way spring to mind as having a contractual effect in the sense of identifying the nature of the contract between the parties. The purpose of timesheets is not normally to contain or evidence the terms of a contract but to record a party's performance of an existing obligation under a contract. In conclusion, Lord Justice Auld in the Court of Appeal held that reference to the CPA conditions on an essentially administrative and accounting document raised in the execution of an existing contract, did not have the clarity, meaning and purpose required to effect a variation incorporating them to the contract. Accordingly, the CPA conditions were not incorporated by variation to the contract between Triact and Meredith and therefore Triact were not to be held liable to indemnify Meredith against its share of liability to Mr Grogan.
CJ-9632
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