|(1964) 1 WLR 125
|Lords Devlin, Reid, Pearce, Hodson, Guest
|DATE OF JUDGMENT
|21st January 1964
|House of Lords
|David MacBrayne Ltd.
In the McCutcheon v. David Macbrayne Ltd.  1 W.L.R. 125 case, it was decided that the sender of goods cannot be bound by terms they are generally aware of but are unaware of the exact terms used by a course of previous dealing in the absence of a contractual document.
SYNOPSIS OF FACTS
McCutcheon requested that his brother-in-law use David MacBrayne, LTD. (MacBrayne) to ship his automobile. This time, McCutcheon’s brother-in-law was not required to sign a risk note from MacBrayne, which transferred the ownership risk to the owner. When the ship carrying McCutcheon’s car struck a rock and sank, McCutcheon’s car was completely destroyed. MacBrayne claimed that since the risk note’s conditions were followed, they were not accountable. McCutcheon was awarded judgment by the trial court, which the court of appeals quashed.
ISSUE FOR CONSIDERATION
- In light of what the plaintiff and defendant have previously transacted, is the plaintiff bound by the terms of an unsigned contract?
CONTENTION BY APPELLANT
The appellant is an Islay farm grieve. In October 1960, while he was still on the mainland, he asked his brother-in-law, an Islay farmer named Mr. McSporran, to have the Respondents send his car to West Loch Tarbert. To get to Port Askaig, Mr. McSporran drove the car. He discovered the purser of their vessel, “Lochiel,” in the Respondents’ office, who provided a freight quote for the car’s return trip. After making the payment and obtaining a receipt, he gave the Respondents the car. Although the “Lochiel” was supposed to deliver it, the ship never made it to West Loch Tarbert. Due to the Respondents’ servants’ careless navigation, she sank and the car was completely destroyed. The appellant is suing for the agreed-upon sum of £480.
CONTENTION BY RESPONDENT
The Respondents argue that the Appellant is obligated to comply with their conditions because of the knowledge that he and his agent acquired from these earlier transactions. However, this case is not at all like the ticket cases. There, the carrier provides a document outlining or mentioning terms that he intends for the contract to contain when making the deal. According to the Respondents, this contract includes their detailed printed conditions.
The House of Lords deemed that an oral contract between the parties did not include the exclusion clause. The claimant’s knowledge of the defendant’s standard contracting conditions did not automatically involve those conditions. It had not been an offer made by the defendant on those terms. Therefore, the exclusion clause was not present in the offer that the claimant accepted. It didn’t matter about the receipt. It was not made available to the claimant until after the contract was established. McCutheon’s claim was validated. The contract had not been successfully amended to include the clause. Because McCutheon was unaware of the particular term, he could not be bound by a clause based on prior dealings. A term may only be imported from prior transactions into a subsequent contract if it can be proven that the parties actually or constructively knew about the terms and agreed to them. With all the contrary view of the house, the appeal was allowed.
- If a party signs a contract, they are bound by it.
- Since term knowledge is evaluated subjectively, past relationships are insufficient unless there was genuine subjective understanding of the condition.
RELATED CASE LAWS
- Parker v. South Eastern Railway Company (1877) 2 C.P.D. 416, The English court ruled that failure to read the contract cannot be used as a justification for breaking its terms. This case serves as a classic illustration of how exclusion clauses work in English contracts. The English Court further held that reasonable steps should be taken to draw the customer’s attention to the contract’s exclusion clauses. To attract the necessary attention, the party relying on the exclusion clause must print it in large, eye-catching letters.
- Hood v. Anchor Line,1918 SC (HL) 143, However, in this instance, neither a written contract nor a ticket existed. Consequently, the basis for the ticket cases is not present.
(Hodson) Just because a party would have signed a document if it had been given to them does not mean that they are obligated to abide by its terms.
(Devlin) Since McCutcheon was unaware of the risk note’s conditions, the conditions cannot be applied based on prior interactions with McCutcheon. In the same way, the risk note wasn’t issued in the current instance.
If the parties keep signing contracts with particular clauses, one party’s unspoken terms may end up in the agreement.
In this case, According to Lord Reid, the defendant in this case might have prevailed if they could have demonstrated that the claimant was aware that they were typically required to sign the risk note, realized that the defendant had neglected to provide it, and remained silent. That would be a bad faith situation. If form is not sued, a man’s 99 consecutive contracts in the same format do not guarantee that the 100th contract will be the same. Previous transactions are only significant if they demonstrate understanding of the terms which are real rather than constructive and consent to them. A party cannot be accused of something he didn’t know about.
“THIS ARTICLE IS WRITTEN BY R.S.KANIMOZHI STUDENT OF SATHYABAMA INSTITUTE OF SCIENCE AND TECHNOLOGY – SCHOOL OF LAW, CHENNAI; INTERN AT LEGAL VIDHIYA.”
Disclaimer: The materials provided herein are intended solely for informational purposes. Accessing or using the site or the materials does not establish an attorney-client relationship. The information presented on this site is not to be construed as legal or professional advice, and it should not be relied upon for such purposes or used as a substitute for advice from a licensed attorney in your state. Additionally, the viewpoint presented by the author is of a personal nature.