The express terms of a commercial contract do not always reflect all terms of the contract. This is because further terms can be ‘implied’ by common law or even by the courts in the case of a dispute. The experienced commercial lawyers at ParrisWhittaker are specialists in advising businesses on their contract terms and related disputes.
A £4 million lottery win in the UK proved anything but a ‘win’ for the players who sued the national lottery operator Camelot after it refused to pay out the cash. A key issue for the courts was the alleged incorporation of terms into the contract between Camelot and the players.
The UK’s High Court ruled1 against the ‘winners’ – who, separately, were jailed for fraud in connection with the game. The ruling has important persuasive authority on the courts in The Bahamas.
What’s the background?
The players claimed they had won £4m after buying a number of lottery scratch cards. However, Camelot became suspicious when going through a security form with one of the players.
The player explained that they paid for the scratch cards using someone else’s bank card, claiming that they had been given permission and that the funds were legitimate. The cardholder denied giving permission and said the transaction had been fraudulent. Camelot refused to pay out.
The players brought proceedings against Camelot for breach of contract and a key issue was around the terms of the contract. Camelot relied on the longstanding legal principle that contractual terms can be incorporated by notice.
It said the express contractual terms were stated to be in the formal Rules for Scratchcard Games. These were incorporated as contract terms by reference to them on the reverse side of the scratch card, and/or applied under the Rules available on the National Lottery Website.
However, the claimants alleged that the terms had not been incorporated as they were not clearly brought to their attention (they said, for instance, there was no reference on the front of the scratch card to the rules or terms and conditions). This argument was rejected by the court.
The court found that the claimants clearly knew there was writing or printing on the lottery ticket and they would have read it if they had wanted to. Reference to the national lottery game rules was clearly legible and in bold – they were, therefore, incorporated as a term of the contract.
What does this mean?
The background to this case is unusual (one also wonders how the players thought they stood a chance of succeeding in any event) but the appeal judges confirmed the long-standing principles of contractual interpretation.
A contract term can be incorporated by notice, so long as reasonable steps have been taken giving notice of them to the other side before the contract is finalised. Any business who is seeks to rely on or incorporate documentation or information extraneous to the express terms of the contract must make sure the requirement for ‘notice’ has been satisfied.
The commercial solicitors at ParrisWhittaker are experienced in advising businesses on their contractual terms and related disputes.
We strongly recommend you review your existing contractual arrangements to make sure your contracts are robust and protect your interests. Our specialists can support you in this – get in touch with us at [ ]
