Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433

Facts

• Interfoto Picture Library Ltd (IPL) supplied photographic transparencies to Stiletto Visual Programmes Ltd (SVP), an advertising firm, for use in a client presentation.
• SVP requested 47 transparencies from IPL.
• IPL sent the transparencies along with a delivery note containing a clause imposing a holding fee of £5 per day for each transparency retained beyond the agreed return date.
• SVP returned the transparencies roughly two weeks late, after which IPL invoiced SVP for £3,783.40 based on the holding fee.
• The dispute centred on whether the onerous holding fee clause was properly incorporated into the contract, and if SVP was given sufficient notice of this term.

Issues

1. Whether the holding fee clause, being onerous and unusual, was adequately brought to SVP’s attention to form part of the contract.
2. Whether the mere inclusion of a burdensome term within standard contract documents constitutes sufficient notice for incorporation.
3. Whether notions of fairness and good faith in English contract law affect the enforceability of particularly onerous contractual terms.

Decision

• The Court of Appeal held that substantially onerous or unusual terms require more than standard notification to be incorporated; they must be specifically brought to the other party's attention.
• Simply including the holding fee clause in the delivery note was insufficient to give SVP reasonable notice of the term.
• IPL failed to take reasonable steps to highlight the "unreasonable and extortionate" clause to SVP, and the clause was therefore not incorporated into the contract.
• The court reinforced that the ‘reasonable notice’ requirement applies to all terms, not merely exemption clauses, and confirmed that IPL could not enforce the holding fee.

Legal Principles

• Contractual terms, especially those which are onerous or unusual, are only incorporated if reasonable steps are taken to bring them to the other party's attention.
• The ‘reasonable notice’ principle, as previously established in Thornton v Shoe Lane Parking, extends to any contract term that is particularly burdensome.
• Fairness and good faith play a role in English contract law through rules requiring special notice of particularly stringent terms, though English law does not impose a general duty of good faith.
• The effectiveness of exclusion, limitation, and other burdensome clauses is also governed by statutory regimes such as the Unfair Contract Terms Act 1977 and related implied terms within the Sale of Goods Act 1979 and the Supply of Goods and Services Act 1982.
• The nature of a contract term dictates the degree of notice required for lawful incorporation.

Conclusion

The Court of Appeal's judgment in Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] QB 433 confirms that onerous or unusual terms are only enforceable if clearly communicated and reasonable notice is provided; inclusion in standard documentation alone is inadequate for contractual incorporation.