L'Estrange v F Graucob Ltd

The judge held, following Lord Herschell LC in Richardson, Spence & Co v Rowntree,[2] 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.

Scrutton LJ found that 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.

The present case is not a ticket case, and it is distinguishable from the ticket cases. In Parker v. South Eastern Ry. Co.[3] Mellish L.J. laid down in a few sentences the law which is applicable to this case. He there said:[4]

"In an ordinary case, where an action is brought on a written agreement which is signed by the defendant, the agreement is proved by proving his signature, and, in the absence of fraud, it is wholly immaterial that he has not read the agreement and does not know its contents."

Having said that, he goes on to deal with the ticket cases, where there is no signature to the contractual document, the document being simply handed by the one party to the other:[5]

"The parties may, however, reduce their agreement into writing, so that the writing constitutes the sole evidence of the agreement, without signing it; but in that case there must be evidence independently of the agreement itself to prove that the defendant has assented to it. In that case, also, if it is proved that the defendant has assented to the writing constituting the agreement between the parties, it is, in the absence of fraud, immaterial that the defendant had not read the agreement and did not know its contents."

In cases in which the contract is contained in a railway ticket or other unsigned document, it is necessary to prove that an alleged party was aware, or ought to have been aware, of its terms and conditions. These cases have no application when the document has been signed. 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.

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.

There can be no dispute as to the soundness in law of the statement of Mellish LJ in Parker v South Eastern Ry Co,[6] which has been read by my learned brother, to the effect that where a party has signed a written agreement it is immaterial to the question of his liability under it that he has not read it and does not know its contents. That is true in any case in which the agreement is held to be an agreement in writing.

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In this case it is, in my view, an irrelevant circumstance that the plaintiff did not read, or hear of, the parts of the sales document which are in small print, and that document should have effect according to its terms. I may add, however, that I could wish that the contract had been in a simpler and more usual form. It is unfortunate that the important clause excluding conditions and warranties is in such small print.