Cape Group Construction (Pty) Ltd t/a Forbes Waterproofing v The Government of the United Kingdom

The Government of the United Kingdom owned a house in Bishopscourt, Cape Town, for the High Commissioner. When the roof developed a leak, Forbes Waterproofing was called in. On 24 June 1999, Forbes faxed a quotation to Mrs Woolley, the estates manager at the British Consulate. The fax contained the scope of work and pricing, and at the bottom, beneath the company's address and registration details, appeared the words "SEE TERMS AND CONDITIONS OVERLEAF" in small print. However, only one page was sent by fax - there was no "overleaf". Mrs Woolley did not notice these words and accepted the quotation telephonically due to urgency. The original quotation with standard terms on the reverse (including a sweeping exemption clause) was posted on 28 June 1999. Mrs Woolley was on leave from 30 June to 12 July 1999. During the repair work, the roof caught fire due to negligence by Forbes's workmen. The Government sued for damages, and Forbes sought to rely on Clause 8 of its standard terms, which excluded liability for loss or damage.

• Whether Forbes's standard terms and conditions, particularly the exemption clause, were incorporated into the contract
• Whether, on a proper construction of the faxed quotation, the words 'See Terms and Conditions Overleaf' purported to incorporate standard terms when no 'overleaf' was transmitted
• Whether the 'ticket cases' principles applied and if so, whether Forbes took reasonably sufficient steps to bring the terms to the attention of the Government
• Whether there was actual or quasi-mutual assent to the incorporation of the standard terms

The appeal was dismissed with costs, including costs of two counsel. The court a quo's finding in favour of the Government was upheld.

Where a party sends a faxed quotation containing the words "See Terms and Conditions Overleaf" but fails to transmit the reverse side containing those terms, the natural construction is that no additional terms apply to that particular contract, and those terms are not incorporated. For standard terms to be incorporated into a contract on the basis of quasi-mutual assent (in the absence of actual consensus), the party relying on such terms must take steps reasonably sufficient to bring them to the other party's attention. Concealing references to important contractual terms, particularly exemption clauses, in small print among non-contractual information at the bottom of a document does not constitute reasonably sufficient notice. A party is entitled to assume that contractual terms are contained in the body of a contractual document above the signature, and is not bound by terms referenced obscurely at the bottom of the page where non-contractual information typically appears.

Schutz JA observed that while there is no clear authority for a general principle that exemption clauses should be construed differently from other contractual provisions, courts should nonetheless be wary of contractual exclusions since they deprive parties of common law rights. In the absence of legislation regulating unfair contract terms, and where a provision does not offend public policy or good faith, careful construction should protect the party whose rights are limited while allowing the other party to protect against liability where legally permissible. The Court endorsed the statement that exemption clauses should be considered with great care, especially if very general in application, and approved Denning LJ's dictum that a party cannot escape just liability under a contract by reason of an exempting clause unless by words that are perfectly clear, effective and precise. The Court noted that while these observations relate to construction of exemption clauses themselves, the same caution applies to provisions purporting to incorporate such clauses. The Court also commented that to make reference to further terms in an obscure manner while not transmitting them is to set a trap, whether consciously or unconsciously, and that the ticket cases doctrine binds those indifferent to the extent of their commitment, not those who, though acting reasonably, are ignorant of what is sought to be imposed.

This case is significant in South African contract law for its treatment of incorporation of standard terms, particularly exemption clauses, into contracts. It establishes important principles regarding: (1) the construction of documents purporting to incorporate terms "overleaf" or on the "reverse" when such terms are not actually transmitted; (2) the application of the "ticket cases" doctrine and the requirement of taking reasonably sufficient steps to bring terms to a party's attention; (3) the distinction between actual consensus, deemed consensus (where a party knows terms exist but doesn't read them), and quasi-mutual assent; and (4) the courts' cautious approach to exemption clauses that limit common law rights. The judgment reinforces that parties seeking to incorporate onerous terms must do so clearly and cannot conceal them in unlikely places on documents. It provides important consumer protection principles in the absence of comprehensive unfair contract terms legislation at the time.