Paltex Dyehouse (Pty) Ltd and Another v Union Spinning Mills (Pty) Ltd

• Jurisdiction: South Africa
• Judge: Friedman JP, Mogoeng J, Nkabinde J
• Judgment Date: 29 June 2000
• Citation: 2000 (4) SA 837 (BH)
• Docket Number: 1346/92
• Hearing Date: 11 May 2000
• Counsel: D A Kuny SC (with him N Segal) for the appellants. R G Buchanan SC for the respondent.
• Court: Bophuthatswana High Court

Friedman JP:

This is an appeal to the H Full Bench of this Division, pursuant to leave to appeal having been granted to the appellants (defendants in the Court a quo) by the Supreme Court of Appeal.

For the purposes of convenience the parties will be referred to as they were in the trial. The appellants were the defendants and the respondent was the plaintiff in actions that were consolidated.

A. The factual background I

When the trial commenced the trial Court ordered that the issues between the parties, which will be dealt with hereunder, be separated. In particular he ordered that the trial would commence initially only in respect of the following, namely: J

Friedman JP

'Which terms and conditions governed the contractual A relationship between plaintiff and defendants.'

At the conclusion of the trial the learned Judge in a Court a quo held

'that the defendants were aware of the terms and conditions of sale appearing on the order confirmations it received from plaintiff and that these form part of the contract between the parties. B

Consequently it is ordered that the terms and conditions on the reverse side of the relevant order confirmations are applicable to the contract between the parties. The defendants are ordered to pay the costs.'

The genesis of the business dealings between the parties commenced in and during 1990 when a certain D G Ferguson first met S S Beraru, a director of the defendant companies. C

The said Ferguson was an agent for several manufacturers in the textile industry.

Ferguson testified that he had acted as agent for the plaintiff for approximately eight or nine years. Being the plaintiff's agent, he had D knowledge of the plaintiff's prices, mode of operations and procedures for the delivery of goods to its customers.

He described his modus operandi in respect of placing orders with the plaintiff as follows:

(i)

When he received an enquiry from a customer, he made enquiries from the plaintiff whether the order could be executed. E

(ii)

If the customer and plaintiff agreed on the order, he prepared an indent form and dispatched copies thereof to the plaintiff and the customer.

(iii)

Thereafter he would receive one copy of a document known as an order confirmation (which is the principal document in issue between F the parties, as will appear later herein) from the plaintiff, which would be a week or two after the dispatch of the indent.

(iv)

The order confirmation was checked with the indent and was then filed away.

(v)

The order confirmation signified and constituted proof that the plaintiff confirmed the order. G

It is now propitious to put into relief the endorsement at the foot of the order confirmation and the conditions of sale appearing on the reverse thereof, not only because whether the defendants knew or were aware thereof was a substantial issue between the parties, but also to delineate, reflect, weigh and analyse the same. H

At the foot of the document entitled 'order confirmation' and on the left hand side the following appears:

'This contract is subject to the general conditions of sale appearing on the reverse hereof. The customer's attention is drawn especially to clause 19 thereof.

Deliveries under this contract will be made in accordance with credit insurance limits.' I

On the reverse side thereof the words 'Union Spinning Mills (Pty) Ltd' and 'conditions of sale' appear in normal and readable print. Thereafter are listed the terms of the conditions of sale in such fine print as to be hardly readable except with the aid of a contrivance such as a magnifying glass. J

Friedman JP

I attach hereto a photostatic copy of the said terms, annexure A, to A indicate the almost minuscule print and the difficulty in reading it.

Clause 19 of the said conditions of sale reads as follows:

'19. Acceptance of conditions

19.1 Upon delivery of the order confirmation to the customer, the customer shall, in the absence of signature of this agreement by the customer, be deemed to have accepted the terms and B conditions of this agreement unless the customer gives written notice to the contrary to the company within three days of receipt of this order confirmation.

19.2 In the event of the customer rejecting these terms and conditions the company shall be entitled in its discretion to cancel this agreement at any stage thereafter by giving written notice to that effect to the customer. In such event the company shall not be liable for any direct or indirect loss suffered by the customer in pursuance C of such cancellation.'

Other clauses of the said conditions of sale, which appear ostensibly to occupy a peripheral position, must be viewed in perspective to gain the full import of the consequences of clauses 14 and 19 of the said conditions of sale. D

They are (i):

'9. Delivery

9.2 The goods shall be delivered to the customer, by the company or by a carrier nominated by the company in such manner as the company may determine.' E

(ii):

'14. Warranty

14.1 The company warrants that the goods are free of defects in material and workmanship, subject to the following provisions.

14.2 The aforesaid warranty shall be in lieu of any warranty implied F by or available at common law.

14.3 Unless otherwise agreed to in writing, the company shall be deemed to have no knowledge of any particular purpose for which the goods are required nor does the company warrant that the goods are fit and sufficient for the purposes of the customer.

14.4 The customer shall inspect the goods immediately upon receipt G thereof. The full details of any alleged defect shall be reported and a sample thereof furnished to the company at the cost of the customer within 30 days of receipt of the goods by the customer.

14.5 If the company is satisfied that the returned sample is defective in material or workmanship and that such defect is not attributable to any other cause, the defective goods shall be returned to the company at its cost. H

14.6 The company shall, within a reasonable period of the return of the defective goods, examine the returned goods and, if it is satisfied that the goods are defective in material or workmanship and that such defect is not attributable to any other cause, it shall at its cost either replace the defective goods or refund the purchase price paid in respect of such defective goods, as it may determine in its discretion. I

14.7 The company's contractual liability in respect of any latent or patent defect in the goods shall be limited to the replacement of the defective goods or to the repayment of the purchase price paid in respect of such defective goods, subject to the provisions of this agreement. The company shall, however, be discharged from such liability in the event of the customer failing to observe strictly the provisions of clause 14. J

Friedman JP

14.8 The company shall furthermore not be liable to the customer for A any loss, including consequential loss, suffered by the customer or any other person arising out of:

14.8.1 any patent or latent defect in the goods, whether in material or workmanship;

14.8.2 negligence on the part of the company in the manufacture of the goods, whether as related to material or workmanship; B

14.8.3 the use of the goods by the customer or any other person.

14.9 Without derogating from the limitation of the company's liability in terms of this clause, the company shall not be liable for any loss or damage arising from faulty fabric or garments being produced by the use of mixed merges or batches of different dye lots. C

14.10 It shall be the responsibility of the customer to satisfy himself that the goods are suitable for the customer's intended purpose. The use of the goods shall be entirely at the risk of the customer.

14.11 The customer shall not be entitled to return the goods to the company except in the circumstances and in accordance with the aforegoing provisions, unless the company expressly agrees otherwise in D writing. Any goods returned to the company in breach of the said provisions shall be returned to the customer at its risk and expense. The acceptance of delivery of such goods by the company shall not prejudice the company's rights as set out above.

14.12 No representation or agreement made on behalf of the company in relation to any claim by the customer shall be binding upon the company unless it is expressly approved in writing under the signature of a E director of the company.'

(iii):

'19. Acceptance of conditions

19.1 Upon delivery of the order confirmation to the F customer, the customer shall, in the absence of signature of this agreement by the customer, be deemed to have accepted the terms and conditions of this agreement unless the customer gives written notice to the contrary to the company within three days of receipt of this order confirmation.

19.2 In the event of the customer rejecting these terms and G conditions the company shall be entitled in its discretion to cancel this agreement at any stage thereafter by giving written notice to that effect to the customer. In such event the company shall not be liable for any direct or indirect loss suffered by the customer in pursuance of such cancellation.'

(iv):

'22. Severable conditions H

If any conditions in this agreement are null and void or unenforcible for any other reason such conditions shall be severable from the remainder of this agreement which shall remain of full force and effect.'

(v):

'26. Notices I

Any notice required to be given in terms of this agreement shall be given in writing either by prepaid mail, telex or telefax.'

A consideration of the aforegoing appears later herein. J

Friedman JP

B. The pleadings A

The summons against Dyehouse was issued in July 1994. The declaration as amended avers that during the period October 1991...