BetterLawNotes-5 (2)

CONTRACT LAW

In order to be able to rely on a written provision, it must be shown that the provision was incorporated into the contract in the first place. Put another way, it must be shown that the particular provision was a term of the offer.

Signed documents

where the provision is contained in a contractual document signed by the defendant, the defendant will generally be bound by that provision whether or not he actually read the provision.

L’Estrange v Graucob [1934] 2 KB 394

The claimant ran a cafe and wanted to buy an automatic cigarette machine from the defendant. She signed a document headed ‘Sales Agreement’ which contained, in small print, a clause which excluded, inter alia, any implied warranties. The claimant signed the document without reading it. The claimant alleged that the machine subsequently supplied by the defendant was defective and sought, inter alia, damages for breach of an implied warranty that the machine was reasonably fit for the purposes for which it was required. The defendant sought to rely on the clause in the Sales Agreement excluding implied warranties. The claimant argued that she should not be bound by the exclusion clause because: when she signed the Sales Agreement, although she thought it was an order form she had no clear idea what she was signing; the defendant had not drawn her attention to the small print; and, she had not known of the clause now relied on by the defendant. The Divisional Court held that the claimant was bound by the clause.

‘When a document containing contractual terms is signed, then, in the absence of fraud, or, I will add, misrepresentation, the party signing it is bound, and it is wholly immaterial whether he has read the document or not.’

Scrutton LJ at 403.

Grogan v Meredith [1996] CLC 1127

C claimed damages from D in respect of machinery hired out by D to T under the terms of a written hire agreement. At the end of the first and second weeks, T’s site manager signed a timesheet at the bottom of which was printed ‘All hire undertaken under CPA conditions’. One of the CPA conditions, which had not been specifically incorporated in the written hire agreement, entitled D to an indemnity from T in respect of damages payable to C. Held: the relevant CPA condition had not been incorporated into the contract between D and T.

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