P shipped his car to the mainland with D on 4 occasions, always being asked to sign a risk note, stating that the risk was with him. On one occasion he was not asked to sign a risk note and the ship sank, losing P’s car. He sued the company, who claimed that their “usual practice” meant that the risk terms were effective despite P not signing anything to that effect. HL allowed P’s claim.
Lord Reid: the “course of dealing” defence can sometimes apply: If P and D make a series of contracts all containing certain conditions and then make another without expressly including those conditions, they can be implied, provided the “officious bystander” would understand it to be their intention that the terms be included. However this isn’t the case here.
Lord Devlin: A term that is usually used cannot be implied into a contract that omits it unless there is knowledge of that term by both parties. If D was unaware of a term that was used 99 times, and omitted from the 100th contract, there can be no implication. Knowledge is a “critical factor”.