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''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 an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...
by
signature A signature (; from , "to sign") is a 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 intent. Signatures are often, but not always, Handwriting, handwritt ...
. There are exceptions to the rule that a person is bound by his or her signature, including
fraud In law, fraud is intent (law), intentional deception to deprive a victim of a legal right or to gain from a victim unlawfully or unfairly. Fraud can violate Civil law (common law), civil law (e.g., a fraud victim may sue the fraud perpetrato ...
,
misrepresentation In common law jurisdictions, a misrepresentation is a False statements of fact, false or misleading''Royal Mail Case, R v Kylsant'' 931Question of law, statement of fact made during negotiations by one party to another, the statement then in ...
and '' non est factum''.
Lord Denning Alfred Thompson Denning, Baron Denning, (23 January 1899 – 5 March 1999), was an English barrister 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 when he w ...
, 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 (Wales), community in Conwy County Borough, Wales, located on the Creuddyn peninsula, which protrudes into the Irish Sea. In the 2021 United Kingdom census, 2021 UK census, the community � ...
. 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', which stated:
"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 Exclusion clauses and limitation clauses are terms in a contract which seek to restrict the rights of the parties to the contract. Traditionally, the district courts have sought to limit the operation of exclusion clauses. In addition to numerous ...
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 County Court at Llandudno 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 Lord Herschell LC 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 The Keeper or Master of the Rolls and Records of the Chancery of England, known as the Master of the Rolls, is the President of the Court of Appeal (England and Wales)#Civil Division, Civil Division of the Court of Appeal of England and Wales ...
, 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'' 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. Facts Finney Lock Seeds Ltd ag ...
''.


Court of Appeal

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. 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 The Sale of Goods Act 1979 (c. 54) is an Act of the Parliament of the United Kingdom which regulated English contract law and UK commercial law in respect of goods that are sold and bought. The Act consolidated the original Sale of Goods Act ...
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 1977 (c. 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 ...
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'', the
Ontario Court of Appeal The Court of Appeal for Ontario (frequently mistakenly referred to as the Ontario Court of Appeal) (ONCA is the abbreviation for its neutral citation) is the appellate court for the province of Ontario, Canada. The seat of the court is Osgoode H ...
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 The High Court of Australia is the apex court of the Australian legal system. It exercises original and appellate jurisdiction on matters specified in the Constitution of Australia and supplementary legislation. The High Court was establi ...
challenged the ''Clendenning'' decision robustly and affirmed L'Estrange. In the UK, in ''Peekay Intermark Ltd v Australia and New Zealand Banking Group Ltd'', Moore-Bick LJ was at pains to emphasise that ''L’Estrange'' set out 'an important principle of English law which underpins the whole of commercial life; any erosion of it would have serious repercussions'. Lord Denning talked about this case in his memoirs, in the context of legal reporting in that era. Denning wrote: "The reporter of L’Estrange v Graucob did not think much of the decision. He didn’t record it in the law reports. But my company had it privately printed: and I went around the County Courts of England winning case after case most unrighteously for the Company."Baron Alfred Thompson Denning, The family story by Lord Denning, London: Butterworths, 1981, p. 99.


See also

*''
George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd ''George Mitchell (Chesterhall) Ltd v Finney Lock Seeds Ltd'' 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. Facts Finney Lock Seeds Ltd ag ...
'' *'' Autoclenz Ltd v Belcher'' 011UKSC 41


References

{{Reflist, 2


Further reading

*J Spencer, ‘Signature, Consent, and the Rule in L’Estrange v Graucob’ 973Cambridge 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