A recent decision, National Asset Loan Management Limited v Michael Barker and Others  IEHC 216, confirmed that as part of a summary judgment application, depending on the facts, terms and conditions of lending can be incorporated and apply to a bank / client relationship in circumstances where it is contended those terms and conditions were never actually given to the borrower. Although the decision relates to a bank / client relationship, it is of broader interest in terms of the incorporation of contractual terms generally. It also sets out a useful summary of the summary judgment jurisdiction, which is typically used for debt claims (which we have not reviewed for the purposes of this article).
By way of background, the plaintiff was the national agency which took over defaulting loans from the State’s banks. The defendant was involved in a property investment transaction for which money was loaned by one such bank. The defaulting loan was transferred to the plaintiff who sought summary judgment against the defendant for over €1.25 million.
The relevant facility letter from July 2008 offered an overdraft of €30,000 and a loan of €957,000 continuing a prior facility relating to the purchase of a bar. The defendant claimed that the general terms and conditions were not notified to him and that he had not been given a copy of the applicable terms and conditions when the loan and overdraft facilities were initially provided.
However, Charleton J noted that they were in fact mentioned in the first paragraph of the Facility Letter. He referred specifically to AIB v Galvin Developments and Others  IEHC 314 in considering circumstances which determine whether or not general terms and conditions are incorporated into a contract. In that case, Finlay Geoghegan J had found that the bank’s terms and conditions had not been enclosed with the facility letters. However, she found that:
“there is an express and clear reference to the incorporation of those terms in the offer [letter]… which was accepted… in writing. [The defendants] could have sought a copy of the Terms if they so wished. They did not do so. It is a well-established principle of contract law that terms may be incorporated into a written agreement signed by the parties by express reference. The failure to enclose a copy of the conditions does not preclude their incorporation by express reference… the agreement…included, by express reference, AIB's General Terms and Conditions Governing Business Lending."
The defendant also contended that the ultimate repayment of the loan was tied to the success of the venture. In this regard, the defendant sought to rely in particular on a memo to the effect that the bank had agreed that there would be no repayment of capital until the bar was sold. However, since this dated from 2009, the court noted that it post-dated the contract. It observed that "a written contract which incorporates all the relevant terms and conditions is hard to quarrel with and is even more difficult to challenge on the basis of subsequent conduct". Ultimately, it concluded that there was nothing in this claim by the defendant to establish a defence.
While there were a number of legal points considered in this judgment, it confirms that terms can be incorporated by reference even where they are not actually provided. While each case would turn on its own facts, a failure by a plaintiff to provide terms and conditions that are referenced in another document will not necessarily be fatal to their incorporation in the contract itself.