Factual and Procedural Background
The Plaintiff participated in a scratchcard game launched by Company A in several newspapers starting 29 April 1995. The game involved revealing sums of money under foil sections on cards distributed with specific newspapers on particular dates, with three distinct ways to win prizes, including a telephone-based mystery bonus. On Monday 3 July 1995, the Plaintiff believed he had won a £50,000 prize based on the sums revealed on his card and the announced mystery bonus amount. However, Company A disputed this, citing a printing error and the application of previously published rules limiting prizes.
The game was designed and operated by Company B in consultation with Company A's marketing department. There was intended to be only one £50,000 prize on 3 July 1995, winnable only through the telephone version of the game. Due to an oversight, cards distributed earlier contained prize sums that should not have appeared, leading to multiple claims for the top prize.
Following difficulties registering his claim and being told his card was void due to a printing error, the Plaintiff was entered into a special draw and received a small share of an additional prize fund but not the main prize. The Plaintiff subsequently initiated legal proceedings against Company A. The High Court, Queen's Bench Division, sitting in Liverpool, dismissed the Plaintiff's claim on 29 June 2000, holding that the contract incorporated the rules published by Company A, including a provision for a draw if more prizes were claimed than available. Permission to appeal was granted.
Legal Issues Presented
- Whether the contract between the Plaintiff and Company A incorporated the published "Rules" governing the scratchcard game.
- Whether Company A took reasonable steps to bring the relevant rules, particularly a rule limiting the number of prizes and providing for a draw if excess claims were made, to the Plaintiff's attention.
- Whether the relevant rule (Rule 5) was onerous or unusual, thus requiring special notice to be effective.
Arguments of the Parties
Appellant's Arguments
- Rule 5 effectively turned apparent winners into losers by allowing a draw if more prizes were claimed than available, which was not clearly communicated.
- The offer under the "Ring and Win Today" heading stated that matching the announced bonus sum would win that amount, but Rule 5 negated this promise.
- The rule was not published in the newspapers on the relevant dates nor clearly referenced on the card, and the vague references to "Normal Mirror Group rules apply" did not sufficiently inform the Plaintiff where to find the rules.
- The frequency and timing of the rules' publication were inadequate to bring the rule to the Plaintiff's attention.
Respondent's Arguments
- The Plaintiff had actual notice of the rules, having likely seen them on previous occasions despite not paying close attention.
- The Plaintiff understood that the game was governed by rules and the references on the card and in the newspaper were sufficient to alert him to their existence.
- Rule 5 was neither onerous nor unusual, as it merely limited a windfall prize and did not impose a punitive burden or exclude liability for negligence.
- Reasonable steps were taken to bring the rule to the Plaintiff's attention, and the rule is common in games and competitions.
Table of Precedents Cited
| Precedent |
Rule or Principle Cited For |
Application by the Court |
| Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd [1989] 1 QB 433 |
Requirement that onerous or unusual terms must be fairly brought to the attention of the party to be bound; assessment of what constitutes reasonable notice depending on the nature of the transaction and term. |
The court applied this principle to assess whether the "Normal Mirror Group rules" and specifically Rule 5 were incorporated into the contract by reasonable notice to the Plaintiff. It concluded that Rule 5 was not onerous or unusual and that the Defendant did enough to bring it to the Plaintiff's attention. |
| Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 |
Special notice required for particularly onerous or unusual contract terms. |
Referenced to contrast the nature of Rule 5 with more onerous terms such as exclusion of liability for negligence. The court found Rule 5 did not require the same level of notice. |
Court's Reasoning and Analysis
The court analysed the formation of the contract as occurring on 3 July 1995 when the Plaintiff accepted the offer by telephoning the hotline. The contract incorporated the term "Normal Mirror Group rules apply," which included Rule 5 providing for a draw if more prizes were claimed than available.
Applying the test from Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd, the court considered whether Rule 5 was onerous or unusual and whether reasonable steps were taken to bring it to the Plaintiff's attention. The court found that Rule 5, while disappointing to the Plaintiff, was neither onerous nor unusual because it did not impose a punitive burden or exclude liability for negligence. It merely limited a windfall prize.
The court noted that the Plaintiff likely had actual or constructive knowledge of the rules, having seen them published on earlier occasions and having encountered references on the card and in the newspapers. Although the rules were not published on every relevant date, the court found the references sufficient to incorporate the rules into the contract.
While one judge expressed sympathy for the Plaintiff's disappointment and noted that the Defendant could have done more to publicize the rules, the majority held that the judge’s factual findings were not clearly wrong and that the appeal should be dismissed.
Holding and Implications
The court DISMISSED THE APPEAL, affirming the decision that the contract incorporated the published rules, including Rule 5, and that the Defendant was entitled to hold a draw to determine the winner of the £50,000 prize given the excess claims.
The direct effect is that the Plaintiff is not entitled to the full £50,000 prize despite initially appearing to have won. No new legal precedent was established; the decision reinforces established principles regarding incorporation of terms and notice requirements for onerous clauses in contract law.