Logic • Principles of Private Law is a bit of an introduction to Contracts. There is a lot of material to cover, we will inevitably skim over some material. • Contract law is the study of legal obligations voluntarily assumed by consenting parties in an agreement. o The course focusses on understanding the nature, significance and operation of legal agreements in different context. Express Terms – Identification (1) By Signature (Textbook, 12.05 – 12.30/Casebook, 12.05 – 12.40) I – THE EFFECT OF SIGNATURE • General Rule: Where a person signs a contractual document, they will be bound by the terms regardless of whether they have read or understood the terms (L‟Estrange v Graucob) o NB: Signature cases have nothing to do with notice, course of dealings, unusual terms or any other factors – these are usually a distraction. Affirming the importance of the rule in L‟Estrange, it doesn‟t matter what happens – if you have signed it, it is binding. P a g e 11 | 264 Summary LPC Notes Advanced Commercial Litigation Revision notes (Distinction) 2022 L‟Estrange v F Graucob Ltd [1934] 2 KB 394 – Divisional Court (Appeal from the County Court) Facts: • L‟Estrange (plaintiff) purchased a vending machine from F Graucob Ltd (defendant). • The plaintiff signed an order form headed „Sales Agreement‟ which contained printed terms of sale and an entire agreement clause: o „The agreement contains all the terms and conditions under which I agree to purchase the machine specified above and any express or implied conditions, statement, or warranty, statutory or otherwise not stated herein is hereby excluded.‟ LAWS1075 – Contracts Samuel Lee Revision Notes P a g e 12 | 264 Summary LPC Notes Advanced Commercial Litigation Revision notes (Distinction) 2022 • Machine arrived but did not work satisfactorily. • Plaintiff brought an action for breach of implied warranty that machine would be reasonably fit for purpose. • Defendant sought to rely on the clause excluding them from liability. Issue: • Whether a party will be bound by signature, where they have not read the relevant terms contained in the contract. Outcome: • Appeal by defendant from trial judgment allowed, i.e. F Graucob Ltd (defendant) wins. Reasoning: Scrutton LJ: • Signature generally indicates an intention to be bound. It is irrelevant that the party has not read it, because signature is an objective affirmation of having read and assented to the terms. • On a policy basis, if we did not uphold this principle, the whole system of signature would be undermined as it would need to be ascertained whether parties have actually read the terms before signing them in each case. Maugham LJ • There is a presumption that the parties intended that the document contain all of the terms (i.e. parol evidence rule – if there is a written document, it is presumed that all of the terms are there). • Agreed with Scrutton LJ re: signature. Ratio: • Where a person signs a contractual document, they will be bound by the terms regardless of whether they have read or understood the terms. II – EXCEPTIONS TO THE SIGNATURE RULE • There are a number of circumstances in which the general rule in L‟Estrange will not apply, such that signature will not presumptively bind parties to a written document containing terms: 1. Where the signature was induced by misrepresentation or fraud, or in some cases of mistake (Curtis v Chemical Cleaning) 2. Where the document cannot reasonably be considered as a contractual document, e.g. because it appears to have another function, such as being a receipt (Toll v Alphapharm)