Legal Principles and Key Points
- In the case of Parker v South Eastern Railway  2 C.P.D. 416, it was held that the test for whether a term has been incorporated into a contract by notice, for example by listing the term on a railway ticket, is whether the defendant gave the claimant reasonable notice, not whether the claimant was actually aware or should have been aware of it.
Facts of the Case
- At D’s railway station, travellers could deposit items in the cloakroom for a charge. There was a notice within the room stating that D would not be responsible for any deposits valued over £10.
- After paying, travellers would then receive a ticket which had the same notice printed on the back in legible writing. On the front the ticket said ‘see back.’
- C deposited his bag in the cloakroom, and it was either misplaced or stolen. C sued for the loss of his bag, valued at £24.
- The judge left two questions to the jury. First did C read or was he aware of the notice? Second, was C, in the circumstances, under any obligation while exercising reasonable and proper caution, to read or to make himself aware of the condition?
- The jury found for C, leading D to appeal on the grounds that the judge had wrongly directed the jury.
- Had D given reasonable notice of their limited liability terms so that C must be bound by them despite lacking knowledge of them?
Held by the Court of Appeal
- Finding for D, that D had given reasonable notice of their limited liability terms through the notice in the cloakroom and the ticket. The fact that C had not read the terms did not invalidate his agreement to them; C was aware that there were terms on the ticket and was thus bound by them.
- If in the course of making a contract one party delivers to another a piece of writing, and the receiving party knows that the paper contains conditions which the deliverer it intends to constitute the contract, I have no doubt that the receiver does, by receiving and keeping it, agree to the conditions contained, although he does not read them and does not know what they are.
- However, there may be causes where it is reasonable that the receiver should assume that the writing contained no condition and should put it in his pocket unread. An example would be a toll-gate ticket with no further use, but an exception would be a bill of lading to ship goods.
- “Now the reason why the person receiving the bill of lading would be bound seems to me to be that in the great majority of cases persons shipping goods do know that the bill of lading contains the terms of the contract of carriage; and the shipowner, or the master delivering the bill of lading, is entitled to assume that the person shipping goods has that knowledge. It is, however, quite possible to suppose that a person who is neither a man of business nor a lawyer might on some particular occasion ship goods without the least knowledge of what a bill of lading was, but in my opinion such a person must bear the consequences of his own exceptional ignorance, it being plainly impossible that business could be carried on if every person who delivers a bill of lading had to stop to explain what a bill of lading was” .
- D must be entitled to make some assumptions about people depositing luggage with them. I think they are entitled to assume that he can read, understands English and pays reasonable attention to the transaction to notice the terms discussed.
- D must take mankind as they find them. If what D does is sufficient to inform people generally that the ticket contains conditions, C ought not to benefit on account of his exceptional ignorance or stupidity or carelessness.
- As such, the judge’s direction to the jury was incorrect. C was under no obligation to read the ticket, but was entitled to leave it unread, and the jury’s attention was not drawn to the real question, namely, whether what D did was reasonably sufficient to give C notice of the condition.