McCutcheon v David MacBrayne Ltd
| McCutcheon v David MacBrayne Ltd | |
|---|---|
Isle of Islay
|
|
| Court | House of Lords |
| Citation(s) | [1964] UKHL 4, [1964] 1 WLR 125 |
| Case opinions | |
| Lord Reid, Lord Devlin, Lord Pearce | |
| Keywords | |
| Contract term, incorporation | |
McCutcheon v David MacBrayne Ltd [1964] UKHL 4 is a Scottish contract law case, concerning the incorporation of a term through a course of dealings.
On 8 October 1960, MV Lochiel (1939), David MacBrayne Ltd's ferry sank, losing Mr McCutcheon's car en route between Islay and the mainland. Usually, David MacBrayne Ltd would have got its customers to sign a risk note. The claimant’s brother in law (Mr McSporran) had made the shipping arrangements, and he did not sign it. Mr McCutcheon had signed a risk note on four occasions and Mr McSporran had done so sometimes before too. Both said they knew notes contained conditions but not what the conditions were. David MacBrayne Ltd argued that even though it was not signed, the term letting Mr McCutcheon assume the risk of an accident had been incorporated into their contract through a course of dealing.
The House of Lords held, reversing the decision of the Court of Session, that there was no regular course of dealing with McCutcheon and no consistent course of dealing with McSporran, and therefore David MacBrayne Ltd could not say that its term shifting the risk of an accident had been incorporated. Lord Reid explained that the term could not be incorporated through reasonable notice or a signature on this occasion alone, and went on.
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 intentions 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 conditions 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 Devlin came to the same conclusion but wished to impose a higher test. According to him actual knowledge would be necessary to incorporate terms.
...
Wikipedia