§ 2.12 Printed Terms on Billheads, Letterheads, Receipts, Baggage Checks, etc.

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It is not the purpose of this section to discuss the problems relating to additional or different terms contained in an acceptance or written confirmation. That topic is discussed in § 3.28-3.39. The basic question here addressed is the effectiveness of terms not contained in the central portions of the writings that form a contract but which are preprinted on letterheads, billheads or elsewhere than in the oral or written core of the agreement.

Individuals and corporations engaged in business often have printed matter on their billheads and letterheads, the purpose of which is to limit in various ways their liabilities and obligations under contracts made by the use of these papers, or on occasion to extend the liabilities of the parties with whom they deal. A common printed line is to the effect that ''all contracts are subject to strikes, accidents, and causes beyond our control.'' The purpose of this appears to be that all contractual promises shall be conditional upon the non-occurrence of the events specified. If the document is an offer, such a condition does not in itself prevent the creation of a power of acceptance. Another common statement is to the effect that ''all contracts and orders are subject to the approval of the home office.''n1 The purpose of this is that the negotiating agent shall have no power to bind the principal, either to an offer or acceptance and that expressions of agreement on the paper shall therefore be no more than an offer to be accepted or rejected by the principal at pleasure.n2

Such provisions as these are effective to attain their purpose only in case they are actually called to the attention of the other party to the negotiation or are so laid out that this party may be reasonably, and is in fact, believed to have been made aware of them.n3 Provisions disclaiming warranties express or implied and limiting liability are commonly found in printed form contracts, such as manufacturers' purchase order forms, transportation tickets, and in notices on food containers, baggage checks and receipts. They may be printed in fine type on the reverse side of a signature page, in such a manner that the signer's attention is not called to them. The court may hold that the signer has not assented to them. If the disclaimer and avoidance of liability are so extreme as to approach the unconscionable, they may even be held to be contrary to public policy.n4 It is a question of fact, to be determined as are other such questions, whether the other party was really aware of the printed provision or was reasonably believed to have been so aware. If the provision is in small type on the edge of the paper, comparatively inconspicuous, and no reference is made to it in the negotiation or in the specially written parts of the document, it will generally be held not to be a part of the agreement or to affect it in any way.n5

The question whether the collateral printed terms are inconsistent with the written ones is a question of interpretation of language. It may be for the court to decide rather than the jury, just as in other cases of interpretation of language.n6

Even if the printed provision is in large type and is expressly brought to the attention of the other party, it is not a desirable way to insert a term in the agreement. If a contract is negotiated in writing, even by a series of informal letters, all important provisions should be incorporated in the communication that is specially prepared for the transaction. Of course, it is enough to insert a few express words, distinctly referring to the printed form.n7 Indeed, it is possible to incorporate in this way many printed forms consisting of numerous paragraphs. In no case should the words of reference fail to identify with certainty the printed matter that is so incorporated.

At times, the printed term is itself an independent offer. For example, a billhead may offer a discount for payment within a certain number of days. There is no reason why this offer cannot be accepted. Similarly, it may provide for interest at a particular rate for bills not paid within a certain number of days. This too operates as an offer, but since it places a burden on the receiver, it must appear that the receiver saw or should have seen the terms of the offer.n8

There is perhaps less objection to printed notices that all agreements are subject to confirmation by the home office than to printed provisions that are intended to be operative as terms of a completed contract. The requirement of confirmation affects the formation of the contract, not the terms thereof by which the parties are to be bound. It is merely a limitation on the power of the negotiating agent to make any contract at all. When a transaction is negotiated by a representative, it is always necessary for the other party to establish the fact that the representative had power to bind the principal. It is possible to establish this in many ways, by various kinds of evidence.n9 The representative may have been given actual authority to close the contract, in entire disregard of the printed notice. And the circumstances may show apparent authority, justifying the other party in believing that actual authority was given and therefore creating actual power to close the deal, in spite of the printed notice. That notice is merely one of the circumstances that must be considered.

If the notice that confirmation is necessary is brought to the attention of the other party, it reduces the document, when it is sent back with an expression of assent, to the status of an unaccepted offer. It will usually be the party who refuses confirmation that will be the defendant in an action-the party trying to escape from obligation. But until confirmation by that party, the other party will usually have the power of revocation up to the time of effective confirmation. There is no such power of revocation if such confirmation is not necessary.n10 But it should be observed that it ought to be somewhat easier to establish the effectiveness of the printed notice as against the party whose letterhead reserves the power to confirm than against the other party.

Printed notices and provisions are not part of the contract and do not affect its formation if they are definitely stricken out by one having power to close the deal. And the same is true if the specially written part of the document expressly excludes the printed provision or contains a term in conflict with it.n11 Of course, a representative without authority to close the deal, actual or apparent, cannot clothe himself or herself with such power by deleting a printed notice negating such authorization. There is this difference, therefore, between a notice purporting to limit an agent's power and one that is intended to become part of the contract that is made by an agent with full power or by the contractor in person.

In Lachs v. Fidelity & Cas. Co., n12 an air traveler, before buying her ticket, procured an insurance policy from the defendant's vending machine that stood near the ticket counter. The policy that the machine delivered to her was limited to flights on any ''Scheduled Airline;'' and there was a wall sign stating that tickets were on sale on both ''Scheduled'' and ''Non-scheduled'' lines. It was held to be a question for the jury whether she had sufficient notice of the limitations of liability intended by the defendant. The insured was killed on the non-scheduled flight; the beneficiary got judgment. Two judges dissented.

Legal Topics:

For related research and practice materials, see the following legal topics:

Contracts LawContract InterpretationGeneral OverviewContracts LawContract Conditions & ProvisionsExpress WarrantiesTransportation LawCarrier Duties & LiabilitiesBills of LadingContracts LawFormationOffersGeneral OverviewContracts LawContract Conditions & ProvisionsGeneral OverviewContracts LawFormationAcceptanceGeneral Overview

FOOTNOTES:

(n1)Footnote 1. Cases of this type are:

Conn. -This section is cited in Batter Bldg. Materials Co. v. Kirschner, 142 Conn. 1, 110 A.2d 464, 468 (1954) , holding that the parties were bound by an arbitration provision that was incorporated by reference in certain written specifications, these in turn being incorporated by reference in the written contract. In such a case, all are interpreted together as constituting the contract.

N.Y. - B.F. Sturtevant Co. v. Fireproof Film Co., 216 N.Y. 199, 110 N.E. 440 (1915) ; Patch v. Smith, 105 A.D. 208, 94 N.Y.S. 692 (1905) .

This section is cited in General Electric Co. v. Masters Mail Order Co., 145 F.Supp. 57, 61, 1956 Trade Cas. (CCH) P68503 (S.D.N.Y.1956) , rev'd, 244 F.2d 681, 1957 Trade Cas. (CCH) P68715 (2d Cir.) , cert. denied, 355 U.S. 824 ; the distribution of order blanks, stating reduced prices on described brands, and the customer's filling in, signing and returning them, were held to constitute advertising, offering and selling such goods in breach of the New York Fair Trade statute.

(n2)Footnote 2. West Penn Power Co. v. Bethlehem Steel Corp., 236 Pa.Super. 413, 348 A.2d 144, 152 (1975) (quoting text); McCarty v. Verson Allsteel Press Co., 89 Ill.App.3d 498, 44 Ill.Dec. 570, 578, 411 N.E.2d 936, 944 (1980) (quoting West Penn).

(n3)Footnote 3.

U.S. - Scott & Williams, Inc. v. Pittston Stevedoring Corp., 422 F.Supp. 40 (S.D.N.Y.1976) . A dock receipt incorporated by reference to a bill of lading. This was ineffective for several reasons. The carrier employed two bill of lading forms and it was unclear which was intended. Second, ''Indeed one needs not a magnifying glass but rather a microscope to read the print of the bill of lading relied upon by defendant....'' 422 F.Supp. at 43 n. 7 . Moreover, the plaintiff was not acquainted with either of the defendant's forms and there was no reasonable expectation that a particular bill of lading would issue.

Cal. - William A. Davis Co. v. Bertrand Seed Co., 94 Cal.App. 281, 271 P. 123 (1928) , a printed disclaimer at the head of the defendant's offer held to constitute a part of the contract.

Mo. - Haddaway v. Post, 35 Mo.App. 278 (1889) , following the signatures to a contract was a printed memorandum, ''Prices named are subject to conditions on the back of this letter.''

N.J. - Fairfield Lease Corp. v. Liberty Temple Universal Church of Christ, Inc., 221 N.J.Super. 647, 535 A.2d 563 (1987) . Although the transaction had no New York contacts, a lease of candy and soft-drink machines contained clauses choosing New York law and New York as the exclusive forum. It was held that a default judgment entered in New York would not be given full faith and credit on a motion for summary judgment for the reason given here as well as notions of conscionability and due process. In Grossman Furniture Co. v. Pierre, 119 N.J.Super. 411, 291 A.2d 858 (1972) , a sales contract for furniture and a refrigerator contained a clause in small (eight point) print permitting repossession. The court holds that because the seller was aware that the buyer had no understanding of the clause, the contract could be reformed.

N.Y. - Klar v. H. & M. Parcel Room, 296 N.Y. 1044, 73 N.E.2d 912 (1947) , a printed limitation of liability to $25 was held ineffective, although the parcel check handed to the depositor had the provision on its face and was headed ''Contract.''

Tex. - Allison v. Hamic, 226 S.W. 483 (Tex.Civ.App.1920) , the words ''Payable at Marfa, Texas'' stamped at the head of a contract at the time of its execution.

Va. - Bardach Iron & Steel Co. v. Tenenbaum, 136 Va. 163, 118 S.E. 502 (1923) , printed words following the signatures of the parties to a contract. ''This contract subject to all contingencies beyond our control, and cannot be broken except by mutual consent, which must be made in writing.''

In Anaconda Copper Mining Co. v. Houston, 107 Ill.App. 183 (1903) , there was printed on the letterhead, ''Where goods are not routed according to shipping directions the total freight charges accruing over lines not designated will be charged to the shippers. This order to be accepted only on this condition.'' This was held to be a part of the contract, since there was a written designation of the shipping route in close proximity to the printed heading, and there was no inconsistency between the written and printed provisions. There was no reference in the body of the letter to the printed heading above.

In re Goodman & Theise, 133 Misc. 473, 233 N.Y.S. 46 (1928) , the fact that the appearance of the paper indicated that there was printing on the back was held to be enough to put a businessperson on notice that the printing contained proposed terms of the contract.

A receipt for money, even though some contract provisions are printed on it, is not an integration of the contract and does not prevent oral evidence of the terms agreed on, if the attention of the one receiving it is not called to the printed terms. Pierce v. Northern Pac. R. Co., 127 Or. 461, 271 P. 976, 62 A.L.R. 644 (1928) and note.

In Boston Lumber Co. v. Pendleton Bros., Inc., 102 Conn. 626, 129 A. 782 (1925) , the court said: ''Whether or not terms and conditions printed upon letter-heads or contract-forms are to be incorporated into an agreement written upon them, where, on the one hand, there are no references to the marginal provisions, and, on the other, those provisions do not conflict with the written agreement, often is a question not easy of solution. It must, after all, be determined upon the principle that one party can insist only upon such terms as are so set forth and so related to the writing and the subject matter of the contract as fairly to manifest to the other party an intent that they are to be obligatory upon him; fair dealing to him, upon the assumption that he will act with reasonable caution, must be the test; and largely each case must stand by itself.'' Accordingly it was held that a printed statement on a ''sale-slip'' to the effect that all agreements were contingent upon fires, strikes, delays of carriers and other unavoidable causes became a term of the contract, since it was ''so plainly and boldly printed that it could not well be overlooked by a purchaser and so apt and usual in the situation involved in the purchase that its materiality would be manifest.'' See, also, the cases of Dinini v. Mechanics' Sav. Bank, 85 Conn. 225, 82 A. 580 (1912) and Chase v. Waterbury Sav. Bank, 77 Conn. 295, 59 A. 37 (1904) , holding that, by accepting and using a bank deposit book containing certain by laws of the bank, relating to the responsibility of the bank to its depositors, printed therein, a depositor assents to them as part of the contract of deposit. On the other hand, in Maynard v. James, 109 Conn. 365, 146 A. 614, 65 A.L.R. 427 (1929) it was held that a receipt casually handed the plaintiff, at the time he left his car at the defendants' garage, containing the provision ''all property of owner's risk,'' was merely a token for the identification of the car and did not constitute a contract, since from the circumstances surrounding the case it was clear that the plaintiff did not assent, nor probably did the defendants have any thought of creating a contractual obligation by the receipt.

In Charles S. Fields, Inc. v. American Hydrotherm Corp., 5 A.D.2d 647, 174 N.Y.S.2d 184 (1958) , appeal dismissed, 10 N.Y.2d 746, 219 N.Y.S.2d 414, 176 N.E.2d 920 (1961) , the plaintiff petitioned for an order restraining arbitration with respect to a contract by which it purchased a heating and cooling system. After long negotiations, the defendant submitted a ''Final Quotation,'' stating the price, complete specifications of the equipment, terms and conditions, and a provision for arbitration. This was an unsigned document of six pages, the last page containing 19 paragraphs in small print, labeled ''Standard Terms and Conditions'', one of these being the arbitration term. Later, the plaintiff sent a purchase order for ''1 Hot Water System as per quotation.'' It asserted, however, that it never assented to the arbitration term. The ''Final Quotation'' being regarded as an ''offer,'' the court held, by 3 judges to 2, that the plaintiff's order referring specifically to the ''Quotation'' was an acceptance of the offer including arbitration. It would be otherwise if there had been no reference to the ''Quotation''. The dissenters thought that the plaintiff should be allowed to submit evidence that the printed ''Terms and Conditions'' on the last page had not been called to its attention.

(n4)Footnote 4. Henningsen v. Bloomfield Motors, Inc., 32 N.J. 358, 161 A.2d 69 (1960) , discussed herein in § 128 and § 1472, and noted under § 607.

In D'Aloisio v. Morton's, Inc., 342 Mass. 231, 172 N.E.2d 819 (1961) , a printed ''receipt and contract'', limiting the liability of a fur storage bailee, signed by the plaintiff's agent, was held to be binding on the plaintiff. The court cited § 1068, 1069, 1472, on the question of validity of such a limitation.

(n5)Footnote 5.

U.S. - Sturm v. Boker, 150 U.S. 312, 14 S.Ct. 99, 37 L.Ed. 1093 (1893) .

Cal. - Los Angeles Inv. Co. v. Home Sav. Bank, 180 Cal. 601, 182 P. 293, 5 A.L.R. 1193 (1919) , printing in a bank depositor's pass book; May Hosiery Mills v. G.C. Hall & Son, 77 Cal.App. 291, 246 P. 332 (1926) ; Western Concrete Structures Co. v. James I. Barnes Constr. Co., 206 Cal.App.2d 1, 23 Cal.Rptr. 506, 513 (1962) , noted under § 3.19.

Ga. - Augusta Factory v. Mente & Co., 132 Ga. 503, 64 S.E. 553 (1909) , it is not sufficient to call a party's attention to a printed strike clause after the contract has already been consummated.

Ill. - Summers v. Hibbard, Spencer, Bartlett & Co., 153 Ill. 102, 38 N.E. 899 (1894) ; Olson v. Wabash Coal Co., 126 Ill.App. 253 (1906) .

Kan. - Olson v. Beer, 112 Kan. 798, 220 P. 1021 (1923) .

Mass. - Kergald v. Armstrong Transfer Exp. Co., 330 Mass. 254, 113 N.E.2d 53 (1953) , carrier's baggage check is primarily for identification; a limitation of liability thereon, not called to the passenger's attention, is not operative.

Minn. - Sitterley v. Gray Co., 199 Minn. 475, 272 N.W. 387 (1937) .

Mont. - Jones v. Great Northern R. Co., 68 Mont. 231, 217 P. 673, 37 A.L.R. 754 (1923) , liability limit is $10 on a parcel check.

N.Y. - B.F. Sturtevant Co. v. Fireproof Film Co., 216 N.Y. 199, 110 N.E. 440 (1915) ; Cohen v. Walworth, 95 Misc. 479, 158 N.Y.S. 1081 (1916) ; Capitol Automatic Music Co. v. Jones, 114 N.Y.S.2d 185 (Mun.Ct.1952) , printing in small type on reverse side of a receipt; Read Machinery Co. v. Harlfinger, 175 N.Y.S. 227 (City Ct.1919) .

Pa. - Cutler Corp. v. Latshaw, 374 Pa. 1, 97 A.2d 234 (1953) , a warrant of attorney which was inconspicuously printed on the reverse side of a sheet was held no part of the contract.

R.I. - Wholey Boiler Works v. Lewis, 45 R.I. 441, 123 A. 595 (1924) , a contract for the manufacture and sale of certain machinery was typewritten on the defendant's letterhead. At the bottom of the page and below the signatures thereon, were several printed provisions not consistent with the typewriting.

Va. - Rosenbaum Hardware Co. v. Paxton Lumber Co., 124 Va. 346, 97 S.E. 784 (1919) .

Wash. - R.J. Menz Lumber Co. v. E.J. McNeeley & Co., 58 Wash. 223, 108 P. 621 (1910) , the printed letterhead was used by the offeree, definitely accepting an unconditional order.

Eng. - Chapelton v. Barry Urban D.C., (1940) 1 K.B. 532 , limitation of liability printed on a chair seat check.

(n6)Footnote 6.

Wash. - R.J. Menz Lumber Co. v. E.J. McNeeley & Co., 58 Wash. 223, 108 P. 621 (1910) .

(n7)Footnote 7. In Yorston v. Brown, 178 Mass. 103, 59 N.E. 654 (1901) , a letter heading to the effect that the defendant's picture and biography were to be printed in a certain book was held to constitute part of the agreement, inasmuch as there was a specific reference to the heading in the main body of the letter.

In Boston Lumber Co. v. Pendleton Bros., Inc., 102 Conn. 626, 129 A. 782 (1925) , the printed provision on a sales slip ''All agreements contingent upon fires, strikes, delays of carriers, and other delays unavoidable or beyond our control,'' at the foot of the slip and below plaintiff's signatures, was held to bind defendant, since the sales slip was incorporated in and became a part of the contract of purchase.

(n8)Footnote 8.

Minn. - American Druggists Ins. v. Thompson Lumber Co., 349 N.W.2d 569 (Minn.App.1984) . A lumber supplier's invoices to a contractor clearly indicated interest would be charged. The court characterizes the ensuing obligation as an ''account stated.'' This may be an enlargement of that category. Butler Mfg. Co. v. Miranowski, 390 N.W.2d 380 (Minn.App.1986) , late charges.

Okl. - Ray F. Fischer Co. v. Loeffler-Green Supply Co., 289 P.2d 139 (Okl.1955) , open account, each invoice plainly stated that the terms were ''30 days and net'' with interest at 6% after 30 days, defendant made one payment that included interest.

Tex. - Preston Farm & Ranch Supply, Inc. v. Bio-Zyme Enterprises, 625 S.W.2d 295 (Tex.1981) . The defendant bought livestock feed on open account from the seller who provided the defendant a monthly statement showing invoice numbers. Each statement noted that accounts more than 30 days old would be charged interest at 1% per month. Where interest was charged, the words ''SERVICE CHARGE'' were stamped on the invoice. The court ruled that under U.C.C. § 2-204 the interest charge had been agreed upon. Absent an agreement, the interest would have been usurious under Texas law.

Wis. - Advance Concrete Forms, Inc. v. McCann Const. Specialties, Inc., 916 F.2d 412 (7th Cir.1990) . A term on an invoice providing for 18% interest is not a material alteration under U.C.C. § 2-207.

(n9)Footnote 9. See works on Agency.

(n10)Footnote 10.

Fla. - Rudolph v. Lewis, 418 So.2d 296 (Fla.App.1982) . Lewis ordered a yacht from Venice Marine, placing a down-payment of $3750. Rudolph then took over the marina. He stopped selling that particular brand and model of yacht, so Lewis and the sales representative signed an order form for a different model. The form contained a printed provision that ''this order is not valid unless signed by dealer.'' The signature blank for the dealer was never completed. Rudolph refused to sell. The appeals court, citing this section, ruled that the order form gave notice of the limitations of the sales representatives powers and the order was merely an unaccepted offer.

La. - AA Home Improvement Co. v. Casem, 145 So.2d 624 (La.App.1962) , defendant signed plaintiff's printed form contract that required acceptance at home office, and revoked before plaintiff signed.

In B. F. Sturtevant Co. v. Fireproof Film Co., 216 N.Y. 199, 110 N.E. 440 (1915) , such a printed notice on the plaintiff's letterhead was asserted by the defendant to make the transaction revocable by him as well as by the plaintiff, as long as the plaintiff's home office had not given notice of approval. But it was established that the defendant's agent had power to close the deal; and apparently no one suggested that the plaintiff's agent did not have such power unless the printed notice itself was sufficient to deprive him of such power. This it did not do, because no reference to it was made by the parties, either orally or in the writing.

(n11)Footnote 11.

Ill. - Olson v. Wabash Coal Co., 126 Ill.App. 253 (1906) .

R.I. - Wholey Boiler Works v. Lewis, 45 R.I. 441, 123 A. 595 (1924) .

In Sturm v. Boker, 150 U.S. 312, 14 S.Ct. 99, 37 L.Ed. 1093 (1893) , it was held that the words ''Mr. H. Sturm in joint account with Herman Boker & Co.,'' or ''Bought of Herman Boker & Co., in joint account'' in the billhead, though apparently indicating a transfer of title, can in no way control, modify, or alter the terms of an accompanying contract which clearly indicate that there has been no transfer of title.

(n12)Footnote 12. 306 N.Y. 357, 118 N.E.2d 555 (1954) . Steven v. Fidelity & Casualty Co. of N.Y., 58 Cal.2d 862, 27 Cal.Rptr. 172, 377 P.2d 284 (1962) , is a similar case, decided by a divided court. It is discussed at length in § 543C, Pkt.Supp.