L’Estrange v Graucob [1934]: Facts and Decision
L’Estrange v Graucob [1934] is a famous contract law case that is known for laying down the rule that the contents of a signed contract are binding on the signatory. This is irrespective of whether the party signing has read them or not.
Given below are the case details:
| Case name & citation: | L’Estrange v F Graucob Ltd [1934] 2 KB 394 |
| The concerned court: | Court of Appeal |
| Year of the case: | 1934 |
| The bench of judges: | Maugham LJ and Scrutton LJ |
| Area of law: | Terms of a contract; exclusion clause |
Facts of the case (L’Estrange v F Graucob Ltd)
The plaintiff, L’Estrange, signed a contract for the acquisition of a cigarette vending machine without reading it. It contained a clause specifying that “any express or implied condition, statement, or warranty, statutory or otherwise not stated herein is hereby excluded.”
The machine turned out to be defective when it was delivered. The plaintiff filed a lawsuit and argued that there existed an implied term as to fitness for purpose under the applicable Sale of Goods Act. The machine did not meet the standards of merchantable quality and was not fit for purpose.
The defendant attempted to rely on the clause in the signed contract that, in effect, barred this implied term from being enforced. It was claimed that it was an ‘entire agreement’ clause and that it excluded all implied conditions.
Issue that arose
Since the plaintiff had not read the contract and was unaware of this clause, was she still bound by it?
Judgment of the Court in L’Estrange v F Graucob Ltd
The decision was taken in favor of the defendant.
The court determined that the plaintiff was obligated by all of the terms of the contract, despite the fact that she had not read the document and was unaware that it contained an exclusion clause.
According to the court, the plaintiff could not prove any fraud or misrepresentation regarding her signing the contract without reading it.
As a general rule, where an exclusion clause is included in a signed document, the signatory is obligated by it unless there was fraud or misrepresentation. The fact that the signatory might not have actually read the contents is unimportant.
The reasoning behind the decision
A person is obligated by the terms of a contract they sign. This is regardless of whether or not the person has read the document or is fully aware of its contents. Contrary to unsigned contracts, signed contracts do not need the opposite party to provide sufficient notice of the document’s contents. Where a document is signed, it will be assumed that the signatory is aware of its contents.
List of references:
- http://ndl.ethernet.edu.et/bitstream/123456789/14461/1/110.pdf
- https://ipsaloquitur.com/contract-law/cases/lestrange-v-f-graucob/
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