One Beacon Insurance v. Crowley Marine Services, Inc.
648 F.3d 258 | Court of Appeals for the Fifth Circuit | 2011
What This Case Means for Subcontractors
Crowley Marine hired Tubal-Cain to repair a barge. A worker was injured during the work. The court ruled that Tubal-Cain was bound by indemnification and insurance requirements that were incorporated into the purchase order by reference, even though the detailed terms appeared on Tubal-Cain's website in small font. The court enforced these obligations, meaning Tubal-Cain had to defend and indemnify Crowley for the injury claim. This matters to subcontractors because it shows courts will enforce contract terms hidden in fine print or on websites if there's a pattern of dealing between the parties.
Key Takeaways
- •Terms incorporated by reference (including those on your website) are enforceable if the other party had knowledge of them and a course of dealing shows acceptance—even if they're in small font or hard to find.
- •Indemnification and insurance flow-down clauses will be enforced against you as a subcontractor. Make sure you understand what you're agreeing to indemnify and insure before signing.
- •A pattern of past dealings can bind you to terms you may not have actively agreed to in writing. Review your standard practices and website terms regularly to avoid unintended obligations.
Terms incorporated by reference will be valid so long as parties had knowledge of and assented to them.
Frequently Asked Question
Can a company bind me to contract terms that are only on their website or in small print?
Yes, according to this case. If there's a pattern of dealing between you and the other party, and they can show you had knowledge of the terms, courts will enforce them even if they're buried on a website or in fine print. Always review what terms you're agreeing to, including any referenced documents or websites, before accepting a purchase order.
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