McCutcheon v David MacBrayne Ltd [1964] UKHL 4 (21 January 1964)

McCUTCHEON (A. P.)

v
DAVID MACBRAYNE LIMITED

Lord Reid

My Lords,

The Appellant is a farm grieve in Islay. While on the mainland in
October, 1960, he asked his brother-in-law, Mr. McSporran, a farmer in
Islay, to have his car sent by the Respondents to West Loch Tarbert. Mr.
McSporran took the car to Port Askaig. He found in the Respondents’
office there the purser of their vessel ” Lochiel “, who quoted the freight
for a return journey for the car. He paid the money, obtained a receipt
and delivered the car to the Respondents. It was shipped on the ” Lochiel ”
but the vessel never reached West Loch Tarbert. She sank owing to
negligent navigation by the Respondents’ servants, and the car was a total
loss. The Appellant sues for its value, agreed at £480.

The question is, what was the contract between the parties? The contract
was an oral one. No document was signed or changed hands until the
contract was completed. I agree with the unanimous view of the learned
judges of the Court of Session that the terms of the receipt which was made
out by the purser and handed to Mr. McSporran after he paid the freight
cannot be regarded as terms of the contract. So the case is not one of the
familiar ticket cases where the question is whether conditions endorsed on
or referred to in a ticket or other document handed to the consignor in
making the contract are binding on the consignor. If conditions not men-
tioned when this contract was made are to be added to or regarded as part
of this contract it must be for some reason different from those principles
which are now well settled in ticket cases. If this oral contract stands
unqualified there can be no doubt that the Respondents are liable for the
damage caused by the negligence of their servants.

The Respondents’ case is that their elaborate printed conditions form
part of this contract. If they do, then admittedly they exclude liability in
this case. I think I can fairly summarise the evidence on this matter. The
Respondents exhibit copies of these conditions in their office, but neither
the Appellant nor his agent Mr. McSporran had read these notices, and I
agree that they can play no part in the decision of this case. Their practice
was to require consignors to sign risk notes which included these con-
ditions before accepting any goods for carriage, but on this occasion no
risk note was signed. The Respondents’ clerkess, knowing that Mr.
McSporran was bringing the car for shipment, made out a risk note for his
signature, but when he arrived she was not there and he dealt with the purser
of the ” Lochiel “, who was in the office. He asked for a return passage
for the car. The purser quoted a charge of some £6. He paid that sum
and then the purser made out and gave him a receipt which he put in his
pocket without looking at it. He then delivered the car. The purser forgot
to ask him to sign the risk note.

The Lord Ordinary believed the evidence of Mr. McSporran and the
Appellant. Mr. McSporran had consigned goods of various kinds on a num-
ber of previous occasions. He said that sometimes he had signed a note,
sometimes he had not. On one occasion he had sent his own car. A risk note
for that consignment was produced signed by him. He had never read the
risk notes signed by him. He says—” I sort of just signed it at the time
” as a matter of form.” He admitted that he knew he was signing in con-
nection with some conditions but he did not know what they were. In
particular, he did not know that he was agreeing to send the goods at
owner’s risk. The Appellant had consigned goods on four previous occa-
sions. On three of them he was acting on behalf of his employer. On the
other occasion he had sent his own car. Each time he had signed a risk

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note. He also admitted that he knew there were conditions but said that he
did not know what they were.

The Respondents contend that, by reason of the knowledge thus gained
by the Appellant and his agent in these previous transactions, the Appellant
is bound by their conditions. But this case differs essentially from the
ticket cases. There, the carrier in making the contract hands over a docu-
ment containing or referring to conditions which he intends to be part of
the contract. So if the consignor or passenger, when accepting the docu-
ment, knows or ought as a reasonable man to know that that is the car-
rier’s intention, he can hardly deny that the conditions are part of the con-
tract, or claim, in the absence of special circumstances, to be in a better
position than he would be if he had read the document. But here, in
making the contract neither party referred to, or indeed had in mind, any
additional terms, and the contract was complete and fully effective without
any additional terms. If it could be said that when making the contract
Mr. McSporran knew that the Respondents always required a risk note to
be signed and knew that the purser was simply forgetting to put it before
him for signature, then it might be said that neither he nor his principal
could take advantage of the error of the other party of which he was aware.
But counsel frankly admitted that he could not put his case as high as
that.

The only other ground on which it would seem possible to import these
conditions is that based on a course of dealing. If two parties have made
a series of similar contracts each containing certain conditions, and then
they make another without expressly referring to those conditions it may
be that those conditions ought to be implied. If the officious bystander
had asked them whether they had intended to leave out the conditions
this time, both must, as honest men, have said ” of course not “. But again
the facts here will not support that ground. According to Mr. McSporran,
there had been no consistent course of dealing ; sometimes he was asked to
sign and sometimes not. And, moreover, he did not know what the con-
ditions were. This time he was offered an oral contract without any refer-
ence to conditions, and he accepted the offer in good faith.

The Respondents also rely on the Appellant’s previous knowledge. I
doubt whether it is possible to spell out a course of dealing in his case.
In all but one of the previous cases he had been acting on behalf of his
employer in sending a different kind of goods and he did not know that
the Respondents always sought to insist on excluding liability for their
own negligence. So it cannot be said that when he asked his agent to make
a contract for him he knew that this or, indeed, any other special term would
be included in it. He left his agent a free hand to contract, and I see
nothing to prevent him from taking advantage of the contract which his
agent in fact made. ” The judicial task is not to discover the actual inten-
” tions of each party: it is to decide what each was reasonably entitled
” to conclude from the attitude of the other ” (Gloag, Contract p. 7). In this
case I do not think that either party was reasonably bound or entitled
to conclude from the attitude of the other as known to him that these con-
ditions were intended by the other party to be part of this contract. I would
therefore allow the appeal and restore the interlocutor of the Lord Ordinary.

Lord Hodson

My Lords,

The decision of the Second Division of the Inner House in favour of the
Defenders seems to me to involve an extension of the application of the
doctrine of ” course of dealing ” which is not warranted by the facts of this

case.

Assuming in favour of the Defenders that the experience of the Pursuer
and his brother-in-law, who acted as his agent, would establish that on

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previous occasions the Defenders’ ” risk note ” embodying conditions
absolving them from the consequences of negligence had been regularly
signed, this does not establish that the legal situation was the same on the
8th October, 1960, when the Pursuer’s car was shipped by his brother-in-
law on his behalf without the risk note being signed. No question of fraud,
or mistake arises, and the only question is whether in some way the
Defenders can establish their immunity by incorporating in the contract of
carriage the conditions which were present on earlier transactions but
absent on the relevant occasion.

The course of dealing on earlier occasions is often relevant in determining
contractual relations but does not assist when, as here, there was on the part
of the Defenders a departure from an earlier course in that they omitted
to ask the Pursuer’s agent to sign the document by which they would have
obtained protection.

It the only question had been whether the Pursuer or his agent had
notice of the conditions sought to be imposed, the observations of Baggallay
L.J. in Parker v. South Eastern Railway Company (1877) 2 C.P.D. 416 at
p. 425 would be material. That case, affirmed in Hood v. Anchor Line,
1918 SC (HL) 143, established that the appropriate questions for the
jury in a ticket case were: (1) Did the passenger know that there was print-
ing on the railway ticket? (2) Did he know that the ticket contained or
referred to conditions? and (3) Did the railway company do what was
reasonable in the way of notifying prospective passengers of the existence
of conditions and where their terms might be considered? It was in this
connection that Baggallay L.J., after stating the liability of the company in
the conduct of their cloakroom business as bailees for reward in the absence
of a special contract constituted by the delivery and acceptance of a ticket
or otherwise, proceeded to say—

” The question then remains whether the plaintiffs were respectively
” aware, or ought to be treated as aware, of the intention of the com-
” pany thus to modify the effect of the ordinary contract. Now as
” regards each of the plaintiffs, if at the time when he accepted the
” ticket, he, either by actual examination of it, or by reason of previous
” experience, or from any other cause, was aware of the terms of
” purport or effect of the endorsed conditions, it can hardly be doubted
” that he became bound by them.”

These observations do not assist the Defenders. No effort was made to
get the risk note signed, or otherwise to make the conditions therein con-
tained a term of the contract of carriage. In short, the Defenders did not
seek to impose any conditions. This is a vital distinction between this case
and Parker’s case, and a decision in favour of the Defenders would involve
an extension and expansion of what was said by Baggallay L.J. which seems
to me to be unsupported by authority and undesirable on principle.

The law as it stands appears hard on the holders of tickets who, unless
they are exceptional persons, will not take pains to make an examination
of a ticket offered to them to see if any conditions are imposed. It would be
scarcely tolerable to take the further step of treating a contracting party
as if he had signed and so bound himself by the terms of a document with
conditions embodied in it, when, as here, he has done no such thing but
may be supposed, having regard to his previous experience, to have been
willing to sign what was put before him if he had been asked.

The Defenders seek to have the interlocutor appealed against affirmed
on two other grounds both of which were rejected in the Scottish courts.
First, they claim that the freight invoice, on which the receipt was placed
acknowledging the payment of £6 5s. 0d., was a contract document contain-
ing a sufficient reference to the conditions and was accepted by the Pursuer’s
agent on his behalf and the Pursuer was therefore bound by them. In the
second place, they claim that by posting four copies of the conditions on
the Port Askaig Pier and three copies on board their vessel ” Lochiel” they
took sufficient steps to give notice of the conditions so as to bind the Pursuer.
The receipt was handed over, as the Lord Justice-Clerk pointed out, after

4

the contract was completed and cannot be treated as an offer. It played
no part in the formation of the contract and there was no reason to suppose
that it referred to conditions.

On both these grounds I agree with the learned judges in the Scottish
courts that the Defenders failed to show that they did what was reasonably
sufficient to bring to the notice of the Pursuer or his agent the conditions
upon which they found.

I would allow the appeal.

Lord Guest

My Lords,

This appeal raises a novel point in regard to the exemptions which can
be claimed from a carrier’s liability, namely: Whether in the absence of
any contractual document a consignor of goods can by a course of previous
dealing be bound by conditions of which he is generally aware but the
specific terms of which he has no knowledge? The judgment of the Second
Division appears to be based on this statement of the law by the Lord
Justice-Clerk, 1962 S.C 512:

” It is, I think, well settled that, if A contracts with B for the
 carriage by B of A’s goods, in the knowledge, gained through previous
” experience of similar transactions, that B carries goods subject to
” conditions, A is bound by these conditions under this later contract,
” if it is of a similar nature to those which have gone before, in the
” absence of agreement or information to the contrary. This applies
” even if A, knowing that there are conditions, does not take the
” trouble to ascertain precisely what these conditions are. If, however,
” the later transaction is carried out in different circumstances, and
” because of that difference A believes that the conditions attached to
” the earlier transactions are not intended to apply, then the conditions
” will not, merely because of A’s previous knowledge, be held to be
” binding upon him. In each case the question of the extent of A’s
” knowledge is a question of fact.”

Although the Lord Justice-Clerk quotes no authority for these propositions
it is, I think, apparent from the observations of Lord Mackintosh (1962
S.C., 516) to the same effect which are said to result from the judgment
of Baggallay L.J. in Parker v. South Eastern Railway Co. (1877) 2 C.P.D.
416 that the Lord Justice-Clerk was relying on Parker’s case. In my
view Parker, which has been accepted as the standard authority on what
are known as ” ticket condition ” cases, (see Hood v. Anchor Line 1918
S.C. (H.L.) 143) was a different case. The observations of Baggallay, L.J.
at p. 425 relied on were made with reference to the ticket cases. In a
ticket case the offer is made by the company to carry the passenger or
goods on the conditions referred to on the ticket and the passenger or
consignor by purchasing the ticket accepts the offer with the conditions
thereon incorporated. The ticket thus becomes a contractual document
containing the conditions, and the passenger is bound by the conditions.
It is, in my view, not legitimate to apply the tests of incorporation of
conditions in such cases to a case like the present where there is no
contractual document. In the present case it is incorrect to assume that the
offer of carriage is made by the Respondents on what are described as
” Standard Conditions “. The verbal contract is made by the consignor
tendering the goods and by the carrier accepting them. A simple contract
of carriage is thereby created. In this situation the Respondents, upon
whom lies the onus to escape liability, would have to show that exempting
conditions have been incorporated into the contract. They cannot do this
merely by evidence of a previous course of conduct. All that the previous
dealings in the present case can show is that the Appellant and his agent
knew that the previous practice of the Respondents was to impose special
conditions. But knowledge on their part did not and could not by itself

5

import acceptance by them of these conditions, the exact terms of which
they were unaware, into a contract which was different in character from
those in the previous course of dealing. The practice of the Respondents
was to insist on a written contract incorporated in the Risk Note. On
the occasion in question a verbal contract was made without reference to
the conditions.

No case was referred to by the Respondents in which it has been held
that a carrier in circumstances such as the present was entitled to avoid
liability, and their counsel was constrained to admit that the decision of
the Second Division would be a novel departure. It would, in my view,
be undesirable to extend the doctrine of the applicability of conditions
any further than at present I agree with the Lord Ordinary that it is
impossible to hold that McSporran as agent for the Appellant agreed to
any conditions. I would allow the appeal.

Lord Devlin

My Lords,

When a person in the Isle of Islay wishes to send goods to the mainland
he goes into the office of MacBrayne (the Respondents) in Port Askaig
which is conveniently combined with the local Post Office. There he is
presented with a document headed ” Conditions ” containing three or four
thousand words of small print divided into twenty-seven paragraphs. Beneath
them there is a space for the sender’s signature which he puts below his
Statement in quite legible print that he thereby agrees to ship on the
conditions stated above. The Appellant, Mr. McCutcheon, described the
negotiations which preceded the making of this formidable contract in the
following terms: –

” Q. Tell us about that document; how did you come to sign it?

” A. You just walk in the office and the document is filled up ready
” and all you have to do is to sign your name and go out.

” Q. Did you ever read the conditions?

” A. No

” Q. Did you know what was in them?

” A. No.”

There are many other passages in which Mr. McCutcheon and his
brother-in-law, Mr. McSporran, endeavour more or less successfully to
appease the forensic astonishment aroused by this statement. People
shipping calves, Mr. McCutcheon said, (he was dealing with an occasion
when he had shipped 36 calves) had not much time to give to the reading.
Asked to deal with another occasion when he was unhampered by livestock,
he said that people generally just tried to be in time for the boat’s sailing;
it would, he thought, take half a day to read and understand the conditions
and then he would miss the boat. In another part of his evidence he went
so far as to say that if everybody took time to read the document,
” MacBrayne’s office would be packed out the door “. Mr. McSporran
evidently thought the whole matter rather academic because, as he pointed
out, there was no other way to send a car.

There came a day, 8th October, I960, when one of the Respondents’
vessels was negligently sailed into a rock and sank. She had on board a
car belonging to Mr. McCutcheon which he had got Mr. McSporran to
ship for him, and the car was a total loss. It would be a strangely generous
set of conditions in which the persistent reader, after wading through the
verbiage, could not find something to protect the carrier against ” any
” loss . . . wheresoever or whensoever occurring “; and Condition 19
by itself is enough to absolve the Respondents several times over for all

6

their negligence. It is conceded that if the form had been signed as usual
the Appellant would have had no case. But by a stroke of ill luck for the
Respondents it was upon this day of all days that they omitted to get
Mr. McSporran to sign the conditions. What difference does that make?

If it were possible for your Lordships to escape from the world of make
believe which the law has created into the real world in which transactions
of this sort are actually done, the answer would be short and simple. It
should make no difference whatever. This sort of document is not meant
to be read, still less to be understood. Its signature is in truth about as
significant as a handshake that marks the formal conclusion of a bargain.

Your Lordships were referred to the dictum of Blackburn, J. in Harris v.
Great Western Railway Company (1876) 1 Q.B.D. 515, at 530. The passage
is as follows:-

” And it is clear law that where there is a writing, into which the
” terms of any agreement are reduced, the terms are to be regulated
” by that writing. And though one of the parties may not have read
” the writing, yet, in general, he is bound to the other by those terms;
” and that, I apprehend, is on the ground that, by assenting to the
” contract thus reduced to writing, he represents to the other side that
” he has made himself acquainted with the contents of that writing and
” assents to them, and so induces the other side to act upon that
” representation by entering into the contract with him, and is conse-
” quently precluded from denying that he did make himself acquainted
” with those terms. But then the preclusion only exists when the case is
” brought within the rule so carefully and accurately laid down by
” Parke, B., in delivering the judgment of the Exchequer in Freeman v.
” Cooke, that is, if he ‘ means his representation to be acted upon, and
” ‘ it is acted upon accordingly: or if, whatever a man’s real intentions
” may be, he so conduct himself that a reasonable man would take
” ‘ the representation to be true, and believe that it was meant that he
” ‘ should act upon it, and did act upon it as true’ “.

If the ordinary law of estoppel was applicable to this case, it might well
be argued that the circumstances leave no room for any representation by
the sender on which the carrier acted. I believe that any other member
of the public in Mr. McCutcheon’s place,—and this goes for lawyers as
well as for laymen,—would have found himself compelled to give the same
sort of answers as Mr. McCutcheon gave ; and I doubt if any carrier who
serves out documents of this type could honestly say that he acted in the
belief that the recipient had ” made himself acquainted with the contents “.
But Blackburn, J. was dealing with an unsigned document, a cloakroom
ticket. Unless your Lordships are to disapprove the decision of the Court
of Appeal in L’Estrange v. Graucob [1934] 2 K.B. 394,—and there has
been no suggestion in this case that you should,—the law is clear, without
any recourse to the doctrine of estoppel, that a signature to a contract is

conclusive.

This is a matter that is relevant to the way in which the Respondents
put their case. They say that the previous dealings between themselves
and the Appellant, being always on the terms of their ” risk note “, as they
call their written conditions, the contract between themselves and the
Appellant must be deemed to import the same conditions. In my opinion,
the bare fact that there have been previous dealings between the parties
does not assist the Respondents at all. The fact that a man has made a
contract in the same form ninety-nine times (let alone three or four times
which are here alleged) will not of itself affect the hundredth contract in
which the form is not used. Previous dealings are relevant only if they
prove knowledge of the terms, actual and not constructive, and assent to
them. If a term is not expressed in a contract, there is only one other way
in which it can come into it and that is by implication. No implication can
be made against a party of a term which was unknown to him. If previous
dealings show that a man knew of and agreed to a term on ninety-nine

7

occasions, there is a basis for saying that it can be imported into the
hundredth contract without an express statement. It may or may not be
sufficient to justify the importation,—that depends on the circumstances;
but at least by proving knowledge the essential beginning is made. Without
knowledge there is nothing.

It is for the purpose of proving knowledge that the Respondents rely
on the dictum of Blackburn, J. which I have cited. My Lords, in spite of
the great authority of Blackburn, J., I think that this a dictum which
some day your Lordships may have to examine more closely. It seems
to me that when a party assents to a document forming the whole or a
part of his contract, he is bound by the terms of the document, read or
unread, signed or unsigned, simply because they are in the contract; and
it is unnecessary and possibly misleading to say that he is bound by them
because he represents to the other party that he has made himself acquainted
with them. But if there be an estoppel of this sort, its effect is in my opinion
limited to the contract in relation to which the representation is made; and
it cannot (unless of course there be something else on which the estoppel
is founded besides the mere receipt of the document) assist the other party
in relation to other transactions. The Respondents in the present case
have quite failed to prove that the Appellant made himself acquainted with
the conditions they had introduced into previous dealings. He is not
estopped from saying that for good reasons or bad he signed the previous
contracts without the slightest idea of what was in them. If that is so,
previous dealings are no evidence of knowledge and so are of little or no
use to the Respondents in this case.

I say ” of little or no use ” because the Appellant did admit that he knew
that there were some conditions though he did not know what they were.
He certainly did not know that they were conditions which exempted the
Respondents from liability for their own negligence, though I suppose, if
he had thought about them at all, he would have known that they probably
exempted the Respondents from the strict liability of a carrier. Most people
know that carriers exact some conditions and it does not matter in this
case whether Mr. McCutcheon’s knowledge was general knowledge of this
sort or was derived from previous dealings. Your Lordships can therefore
leave previous dealings out of it and ask yourselves simply what is the
position of a man who, with that amount of general knowledge, apparently
makes a contract into which no conditions are expressly inserted?

The answer must surely be that either he does not make a contract at all
because the parties are not ad idem or he makes the contract without the
conditions. You cannot have a contract subject to uncommunicated con-
ditions the terms of which are known only to one side.

It is at this point, I think, that their Lordships in the Second Division
fell into error. The Lord Justice-Clark said: ” It is, I think, well settled
” that, if A contracts with B for the carriage by B of A’s goods, in the
” knowledge, gained through previous experience of similar transactions,
” that B carries goods subject to conditions. A is bound by these conditions
” under this later contract, if it is of a similar nature to those which have
” gone before, in the absence of agreement or information to the contrary,
” This applies even if A, knowing that there are conditions, does not take the
” trouble to ascertain precisely what these conditions are “. Similarly Lord
MacIntosh said: ” In these circumstances, I am of the opinion, following
” what I understand to be the law as laid down in Parker v. South Eastern
” Railway Company (1877) 2 C.P.D. 416, and particularly by Baggallay,
” L.J. at 425, that the pursuer, being aware by reason of his own previous
” experience, and of that of the agent who happened to be acting for him
” in the present transaction, that goods were carried on the defender’s vessels
” subject to certain conditions, and having been given no reason to think
” that these conditions were not still operative on 8th October, 1960, was
” bound by the conditions, although, as was proved to have been the case.
‘ he had never at any time acquainted himself with their purport “.

8

My Lords, I think, with great respect, that this is to introduce a new
and fundamentally erroneous principle into the law of contract. There
can be no conditions in any contract unless they are brought into it by
expression, incorporation or implication. They are not brought into it
simply because one party has inserted them into similar transactions in the
past and has not given the other party any reason to think that he will
not want to insert them again. The error is based, I think, on a misunder-
standing of what are commonly called the ticket cases ; I say this because the
single authority cited for the proposition is one of the leading ticket cases,
Parker v. South Eastern Railway Company. The question in these cases
is whether or not the passenger has accepted the ticket as a contractual
document. If he knows that it contains conditions of some sort, he must
know that it is meant to be contractual. If he accepts it as a contractual
document, then prima facie (I am not dealing with questions of reasonable
notice) he is bound by the conditions that are printed on it or incorporated
in it by sufficient reference to some other document, whether he has inquired
about them or not. That is all that Baggallay, L.J. is saying in Parker v.
South Eastern Railway.

In the present case there is no contractual document at all. There is not
so much as a peg on which to hang any terms that are not expressed in the
contract nor a phrase which is capable of expansion. It is as if the Appellant
had been accepted as a passenger without being given a ticket at all. There
is then no special contract and the contract is the ordinary one which the
law imposes on carriers. As Baggallay, L.J. said at 424, ” This clearly
” would be the nature of the contract if no ticket were delivered, as occasion-
” ally happens “.

If a man is given a blank ticket without conditions or any reference to
them, even if he knows in detail what the conditions usually exacted are, he
is not, in the absence of any allegation of fraud or of that sort of mistake
for which the law gives relief, bound by such conditions. It may seem a
narrow and artificial line that divides a ticket that is blank on the back from
one that says ” For conditions see time-tables “, or something of that sort,
that has been held to be enough notice. I agree that it is an artificial line
and one that has little relevance to every day conditions. It may be beyond
your Lordships’ power to make the artificial line more natural: but at least
you can see that it is drawn fairly for both sides and that there is not one
law for individuals and another for organisations that can issue printed
documents. If the Respondents had remembered to issue a risk note in this
case, they would have invited your Lordships to give a curt answer to any
complaint by the Appellant. He might say that the terms were unfair and
unreasonable, that he had never voluntarily agreed to them, that it was
impossible to read or understand them and that anyway if he had tried to
negotiate any change the Respondents would not have listened to him. The
Respondents would expect him to be told that he had made his contract
and must abide by it. Now the boot is on the other foot. It is just as
legitimate, but also just as vain, for the Respondents to say that it was
only a slip on their part, that it is unfair and unreasonable of the Appellant
to take advantage of it and that he knew perfectly well that they never
carried goods except on conditions. The law must give the same answer:
they must abide by the contract they made. What is sauce for the goose
is sauce for the gander. It will remain unpalatable sauce for both animals
until the legislature, if the courts cannot do it, intervenes to secure that
when contracts are made in circumstances in which there is no scope for free
negotiation of the terms, they are made upon terms that are clear, fair and
reasonable and settled independently as such. That is what Parliament has
done in the case of carriage of goods by rail and on the high seas.

I have now given my opinion on the main point in the case and the one
on which the Respondents succeeded below. On the other points on which
the Respondents failed below and which they put forward again as grounds
for dismissing the claim, I have nothing to add to what your Lordships have
already said. In my opinion the appeal should be allowed.

9
Lord Pearce

My Lords,

At common law the Defenders had a duty of care to the Pursuer and a
liability for negligence, unless by some special contract they have excluded
that duty or liability. Usually such a special contract is achieved by the
carrier producing a written contract which the customer signs, or by the
carrier printing and displaying regulations to which reference is made on
the ticket which the customer buys. In such a case the customer is bound
by the conditions embodied in the written contract, or in the printed con-
ditions to which the ticket refers, even if he does not read them and does not
know their import, always provided that the carrier shews that he has taken
reasonable steps to bring the conditions to the customer’s notice (Parker v.
South Eastern Railway Co. 2 C.P.D. 416; Hood v. Anchor Line 1918 S.C.
(H.L.) 143 per Lord Dunedin at 148). In the present case, however, there
was no written contract or ticket. Therefore, the foundation on which the
ticket cases rests is absent.

A special contract may also be made orally in express terms which set
out the exclusion of liability or incorporate by reference conditions that do
so. But no such express oral contract is suggested here.

It follows that the Defenders must seek to rely on some implied special
contract. In this they are hampered by the fact that the common law
already implies a contract between carrier and customer (in default of other
agreement) to the effect that a carrier will be entitled to a reasonable reward
and that he must carry the goods with care and will be liable for negligence.
No special contract can be inferred from the basic facts that the Pursuer’s
agent handed over the car for carriage and paid to the Defenders a sum for
the freight. For the normal inference is that an ordinary common law
contract for carriage of goods was intended. What other facts, then, can
the Defenders adduce which will shew that the normal inference is erroneous
and that in truth a special contract should be implied?

The Defenders rely on the course of dealing. But they are seeking to
establish an oral contract by a course of dealing which always insisted on
a written contract. It is the consistency of a course of conduct which gives
rise to the implication that in similar circumstances a similar contractual
result will follow. When the conduct is not consistent, there is no reason why
it should still produce an invariable contractual result. The Defenders
having previously offered a written contract, on this occasion offered an oral
one. The Pursuer’s agent duly paid the freight for which he was asked and
accepted the oral contract thus offered. This raises no implication that the
conditions of the oral contract must be the same as the conditions of the
written contract would have been had the Defenders proferred one.

Recourse is then sought to knowledge and intention. This is not a case
where there was any bad faith on the part of the Pursuer or his agent. Had
the Pursuer’s agent snatched at an offer that he knew was not intended, or
deliberately taken advantage of the Defenders’ omission to proffer their
usual printed form for his signature, the situation would be different and
other considerations would apply. But neither the Pursuer nor his agent
gave any thought to conditions. Nor had they any knowledge that clause 11
would contain, wrapped in thirty lines of small print and in language in-
telligible only to a lawyer or a person of education and perspicacity, a total
exclusion of liability for almost every conceivable act of the Defenders that
might damage the Pursuer’s goods.

The Defenders never intended to offer or make any oral contract on the
terms of the printed conditions. They intended to offer a written contract
and by mistake they offered an oral one. The Pursuer was unaware of the
mistake. He accepted an oral contract but he never intended to accept an
oral contract on the printed conditions. He knew that he usually had to

10

sign a form which he supposed contained some conditions. When he was
offered an oral contract without conditions he accepted with no thought
about its terms. Why should such intentions or knowledge on the part of
the contracting parties lead the Court to create a contract which neither
intended? The furthest to which this argument of the Defenders could lead
is to the conclusion that the parties were never ad idem ; in which case there
was no special contract and the common law contract prevails.

Some reliance was placed on the fact that the Pursuer and his agent were
in no wise misled nor suffered from the absence of the written form since
they would not have read it or paid any attention to it in any event. This
argument has a cynical flavour. It really amounts to saying that because
the Pursuer would have been bound by a harsh condition, of which he did
not know, if the Defenders had taken the proper legal steps, he should be
likewise bound when they neglected to take those steps. The law inflicts
some hardship on ignorant or careless plaintiffs who accept a ticket or sign
a printed form in that it holds them bound by printed conditions which they
have not read and of which they know nothing. The reasons for this are
given in Parker v. South Eastern Railway Company (above). If the De-
fenders are to have the benefit of the reasoning in Parker’s case they must
take the necessary steps. To decide in the Defenders’ favour on the facts
of this case would be a further extension of the protection afforded to de-
fendants by the ticket cases. Such an extension seems to me very undesirable.

With all respects to the contrary view of the Inner House, I agree with the
reasoning and conclusions of the learned Lord Ordinary. I would there-
fore allow the appeal.

Source: https://www.bailii.org/