Parker v South Eastern Railway Co [1877] 2 CPD 416

📌 Facts

Mr Parker deposited a bag in the cloakroom at Charing Cross railway station and paid two pence. He was given a ticket bearing the words “See back.” The back of the ticket contained a clause stating that the railway company would not accept responsibility for any item worth more than £10. A similar notice was displayed in the cloakroom.

Parker did not read the ticket because he believed it was merely a receipt. His bag, which was worth more than £10, was subsequently lost or stolen. Parker claimed compensation from the railway company. The company relied on the limitation clause printed on the ticket.

📌 Issue

The issue was whether the limitation clause had been incorporated into the contract even though Parker had not read it. The court therefore had to determine whether the railway company had taken reasonable steps to notify Parker that the ticket contained contractual conditions.

📌 Decision

The Court of Appeal held that the jury in the trial at first instance had been directed using the wrong legal test and ordered a new trial. In that trial, the jury had been directed that if Parker had failed to read the terms, then he could not be bound by them.

Mellish LJ explained:

“If the person receiving the ticket did not see or know that there was any writing on the ticket, he is not bound by the conditions; that if he knew there was writing, and knew or believed that the writing contained conditions, then he is bound by the conditions.”

In other words, Parker would be bound providing the jury were satisfied he had been given sufficient notice.

📌 Analysis

The case is a leading authority on the incorporation of contractual terms by reasonable notice.

It established that:

• a person may be bound by contractual terms even if they have not actually read them;

• the party relying on the terms must take reasonable steps to bring them to the other party’s attention;

• the document must reasonably appear to contain contractual conditions; and

• whether reasonable notice was given depends on the circumstances of the transaction.

The decision confirms that actual knowledge is not always required. However, a business cannot rely on hidden conditions unless reasonable notice of them was provided before or when the contract was formed.

Reasonable Notice

Where a contractual document is unsigned, the party relying on its terms must show that reasonable notice was given. The court does not ask whether the customer actually read the terms. Instead, it considers whether the business took reasonable steps to alert an ordinary person that contractual conditions applied. In Parker’s case, the words “See back” and the notice in the cloakroom were relevant when deciding whether sufficient notice had been given.

Nature of the Document

The document must be one that a reasonable person would expect to contain contractual terms. A ticket may contain contractual conditions where it is clearly presented as part of the transaction. However, where a document appears to be no more than a receipt, it may be unreasonable to expect the customer to search it for legal terms. Parker believed that the ticket was merely evidence that the railway company had received his bag. The court therefore treated the sufficiency of the notice as a factual question for the jury.

Failure to Read the Terms

A customer cannot necessarily avoid a term by choosing not to read it. Where reasonable notice has been given, the customer may be bound regardless of whether the term was actually read or understood. The law focuses on the steps taken by the party seeking to rely on the condition rather than the customer’s subjective decision not to read it.

Further Reading

• Contract Terms Revision Sheet