Ignoring those pesky 'T&Cs' hyperlinks in a purchase order can be costly!
Michael Hill has been in an ongoing dispute with its packaging supplier, Gispac, about whether a set of hyperlinked T&Cs in purchase orders applied to their arrangement.
Earlier this year, the NSW Supreme Court handed down judgment in favour of Gispac for more than $2million in damages. Gispac argued that Michael Hill was required under their agreement to purchase a minimum amount of packaging each year and to use Gispac exclusively for its packaging supplies. These minimum purchase amount and exclusivity requirements were not specifically set out in the purchase order signed by Michael Hill but, Gispac argued, were contained in hyperlinked T&Cs.
While the quantum of damages was reduced in the appeal decision handed down in August, the Court upheld the principle that a set of T&Cs signed by a business can be binding even if the business has not read those T&Cs.
Key takeaways
Michael Hill's experience serves as an important reminder to carefully check all terms referred to in a purchase order or quote for exposure to costs far in excess of what you're paying. Things such as uncapped liability, requirement to deal exclusively with the supplier, high interest rates on late payments, time limits on warranty claims and no exclusion of consequential loss, are just some examples of what we find in B2B agreements. Reach out to the Walter Baden team if you have any questions about your supplier T&Cs.