HOME

TheInfoList



OR:

''L'Estrange v F Graucob Ltd'' 9342 KB 394 is a leading
English contract law English contract law is the body of law that regulates legally binding agreements in England and Wales. With its roots in the lex mercatoria and the activism of the judiciary during the industrial revolution, it shares a heritage with countries ...
case on the incorporation of terms into a
contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tr ...
by
signature A signature (; from la, signare, "to sign") is a Handwriting, handwritten (and often Stylization, stylized) depiction of someone's name, nickname, or even a simple "X" or other mark that a person writes on documents as a proof of identity and ...
. There are exceptions to the rule that a person is bound by his or her signature, including
fraud In law, fraud is intentional deception to secure unfair or unlawful gain, or to deprive a victim of a legal right. Fraud can violate civil law (e.g., a fraud victim may sue the fraud perpetrator to avoid the fraud or recover monetary compen ...
,
misrepresentation In common law jurisdictions, a misrepresentation is a false or misleading '' R v Kylsant'' 931/ref> statement of fact made during negotiations by one party to another, the statement then inducing that other party to enter into a contract. The ...
and ''
non est factum ( Latin for "it is not ydeed") is a defence in contract law that allows a signing party to escape performance of an agreement "which is fundamentally different from what he or she intended to execute or sign". A claim of means that the signatu ...
''.
Lord Denning Alfred Thompson "Tom" Denning, Baron Denning (23 January 1899 – 5 March 1999) was an English lawyer and judge. He was called to the bar of England and Wales in 1923 and became a King's Counsel in 1938. Denning became a judge in 1944 whe ...
, as a young barrister, represented the company in this action, but later - for instance, speaking in Parliament in 1977 - made clear that he regarded the decision as wrong.


Facts

Miss Harriet Mary L'Estrange had a cafe in Great Ormes Road,
Llandudno Llandudno (, ) is a seaside resort, town and community in Conwy County Borough, Wales, located on the Creuddyn peninsula, which protrudes into the Irish Sea. In the 2011 UK census, the community – which includes Gogarth, Penrhyn Bay, Craig ...
. Two travelling salesmen, Mr Page and Mr Berse, representing Mr Graucob's slot machine business in City Road, London, came to visit her. She was persuaded to purchase a cigarette machine and signed a document entitled 'Sales Agreement', stating:
"Please forward me as soon as possible: One Six Column Junior Ilam Automatic Machine... which I agree to purchase from you on the terms stated below...."
Further along, in small print, an exclusion clause was stated:
"This agreement contains all the terms and conditions under which I agree to purchase the machine specified above, and any express or implied condition, statement, or warranty, statutory or otherwise not stated herein is hereby excluded.) H. M. L'Estrange."
She did not read the document. She was supposed to pay for the machine in instalments. But after machine was delivered it got jammed and did not work, despite mechanics coming to fix it. Miss L'Estrange thus refused to continue paying her installments and brought an action in the
Carnarvonshire , HQ= County Hall, Caernarfon , Map= , Image= Flag , Motto= Cadernid Gwynedd (The strength of Gwynedd) , year_start= , Arms= ''Coat of arms of Caerna ...
County Court at
Llandudno Llandudno (, ) is a seaside resort, town and community in Conwy County Borough, Wales, located on the Creuddyn peninsula, which protrudes into the Irish Sea. In the 2011 UK census, the community – which includes Gogarth, Penrhyn Bay, Craig ...
for the sums already paid, arguing the machine was not fit for purpose. Mr Graucob contended that any warranties for fitness were expressly excluded by the contractual agreement she signed.


Judgment


County Court

The judge held, following the
Lord Herschell LC Farrer Herschell, 1st Baron Herschell, (2 November 1837 – 1 March 1899), was Lord High Chancellor of Great Britain in 1886, and again from 1892 to 1895. Life Childhood and education Herschell was born on 2 November 1837 in Brampton, Hamps ...
in '' Richardson, Spence & Co v Rowntree'', that Mr Graucob was not entitled to rely on the exclusion clause. Lord Herschell had asked three questions: (1) Did the plaintiff know that there was writing or printing on the document? (2) Did she know that the writing or printing contained conditions relating to the terms of the contract? (3) Did the defendants do what was reasonably sufficient to give the plaintiff notice of the conditions? The judge held that question (3) was not satisfied. Mr Graucob appealed. Alfred Thompson Denning, at that time a barrister, represented F Graucob Ltd. Fifty years later, as Master of the Rolls, Denning described the case as emblematic of a "bleak winter for our law of contract" in his judgment on ''
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd ''George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd'' 982EWCA Civ 5and
Scrutton_LJ_ Sir_Thomas_Edward_Scrutton_(28_August_1856_–_18_August_1934)_was_an_English_barrister,_judge,_and_legal_writer. _Biography Thomas_Edward_Scrutton_was_born_in__London,_the_son_of_Thomas_Urquhart_Scrutton,_a_wealthy_shipowner_and_head_of_the_well-_...
_found_the_exclusion_clause_formed_part_of_the_contract._It_was_immaterial_that_L'Estrange_had_not_read_the_clause._The_fact_that_she_signed_it_meant_that_she_was_bound_by_it._She_is_deemed_to_have_read_and_agreed_to_the_terms_of_the_contract. Frederic_Maugham,_1st_Viscount_Maugham.html" ;"title="Thomas_Edward_Scrutton.html" "title="9832 AC 803 is a case concerning the sale of goods and exclusion clauses. It was decided under the Unfair Contract Terms Act 1977 and the Sale of Goods Act 1979. ...
''.


Court of Appeal

Thomas Edward Scrutton">Scrutton LJ Sir Thomas Edward Scrutton (28 August 1856 – 18 August 1934) was an English barrister, judge, and legal writer. Biography Thomas Edward Scrutton was born in London, the son of Thomas Urquhart Scrutton, a wealthy shipowner and head of the well- ...
found the exclusion clause formed part of the contract. It was immaterial that L'Estrange had not read the clause. The fact that she signed it meant that she was bound by it. She is deemed to have read and agreed to the terms of the contract. Frederic Maugham, 1st Viscount Maugham">Maugham LJ concurred, though expressing his regret at the result. He held he was bound to do so. He said the only two possibilities were that the document was signed non est factum, or that the document was induced to be signed by a misrepresentation.


Significance

The case still holds significance, not because it would be decided the same today in relation to a consumer, but because it establishes the basic principle that one is bound by their signature, as a general starting point. This is particularly important among businesses. If the same facts arose again today, the case would be regulated by unfair terms legislation, and Miss L'Estrange would have won, despite having signed. The Sale of Goods Act 1979 section 14(3) implies that goods for sale have a warranty from the seller as to their fitness. Between two businesses dealing as commercial parties of equal bargaining strength, this term could be excluded. But when one party is a consumer, the
Unfair Contract Terms Act 1977 The Unfair Contract Terms Act 1977c 50 is an Act of Parliament of the United Kingdom which regulates contracts by restricting the operation and legality of some contract terms. It extends to nearly all forms of contract and one of its most im ...
section 6(2)(a) stipulates that the warranty about fitness cannot be excluded. So Graucob would have been in breach of contract for providing a faulty machine in any event. In any event, one commentator, Spencer, argued that Graucob’s representatives knew Miss L’Estrange was making a mistake, and therefore should not have won. He argued refusal to apply the law on unilateral mistake where there is a signature comes from misunderstanding the parol evidence rule and non est factum rules. In the Canadian case, ''
Tilden Rent-A-Car Co. v. Clendenning ''Tilden Rent-A-Car Co. v. Clendenning'' (1978), 83 DLR (3d) 400 is a leading Canadian contract law decision from the Court of Appeal for Ontario on standard form contracts. The Court held that a party can only be bound to a signed standard form c ...
'' the Ontario Court of Appeal held the signature would only bind if it was reasonable for the party relying on the signed document to believe the signer assented to onerous terms (i.e. unlike Grogan, where the document is intended to have contractual effect). By contrast, in 2004 in '' Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd'',. the High Court of Australia challenged the ''Clendenning'' decision robustly and affirmed L'Estrange. In the UK, in '' Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd''
006 Alec Trevelyan (006) is a fictional character and the main antagonist in the 1995 James Bond film '' GoldenEye'', the first film to feature actor Pierce Brosnan as Bond. Trevelyan is portrayed by actor Sean Bean. The likeness of Bean as Ale ...
EWCA Civ 386 3/ref> Moore-Bick LJ was at pains to emphasise that ''L’Estrange'' sets out ‘an important principle of English law which underpins the whole of commercial life; any erosion of it would have serious repercussions.’


See also

*''
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd ''George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd'' 982EWCA Civ 5and [19832 AC 803 is a case concerning the sale of goods and exclusion clauses. It was decided under the Unfair Contract Terms Act 1977 and the Sale of Goods Act 1979. ...
'' *''Autoclenz Ltd v Belcher'' [2011] UKSC 41


Notes

{{Reflist, 2


References

*J Spencer, ‘Signature, Consent, and the Rule in L’Estrange v Graucob’ [1973] Cambridge Law Journal 104 Lord Denning cases English incorporation case law Court of Appeal (England and Wales) cases 1934 in British law 1934 in case law