O'Brien v MGN Ltd

A party relying on standard terms must take reasonable steps to bring the particular term to the other party’s notice. The adequacy of notice depends on the transaction, the parties and the term’s nature and effect. A term with an onerous, unusual or outlandish effect requires greater notice, although those descriptions are not terms of art.

A competition rule providing for a draw when claims exceed the available prizes is neither onerous nor unusual merely because it converts an apparent winner’s entitlement into a chance of winning. Clear references to the applicable rules on the game card and in the publication containing the offer can therefore provide sufficient notice.

The claimant possessed a newspaper scratchcard showing two sums of £50,000. After the corresponding telephone hotline announced £50,000 as the bonus amount, he believed that he had won that sum. A printing oversight produced 1,472 similar claims, although the promoter had intended to offer only one £50,000 prize.

The promoter relied on rule 5 of its published competition rules. That rule required a draw where more prizes were claimed than were available. His Honour Judge Hegarty QC held that the contract was made when the claimant telephoned in response to the newspaper’s offer, that the rules were incorporated, and that the promoter could insist upon a draw. The claim was dismissed and permission to appeal was granted.

The central issue was whether the references to the promoter’s rules gave fair and reasonable notice of rule 5, having regard to its nature and effect.

1. Appeal dismissed unanimously. Hale LJ delivered the leading judgment, with which Potter LJ agreed. The contract was made when the claimant telephoned in response to the offer published that day. The offer expressly stated that the normal rules applied. Those words formed part of the contract whether or not the claimant read or attended to them. The remaining question was whether they sufficiently incorporated rule 5. [19]–[20]

2. The governing inquiry was whether the promoter had fairly and reasonably brought the particular term to the claimant’s notice. This was a question of fact concerning the particular transaction, parties and term. Reasonable steps must be taken to draw printed conditions to the other party’s attention. A particularly onerous or unusual condition requires greater notice because notice adequate for one term may be inadequate for another. [20]

3. Rule 5 was neither onerous nor outlandish. It imposed no additional burden and did not exclude liability for negligently caused personal injury or impose an extortionate financial charge. It merely deprived the claimant of an anticipated windfall obtained for minimal expenditure. [21]

4. The rule was also not unusual in its context. Participants knew that newspaper competitions had rules and that the number of prizes was limited. Where a mistake produced more claims than intended, either sharing the prize or drawing lots was a foreseeable solution. The evidence did not establish that a draw would be unusual. [22]

5. “Onerous or unusual” were not technical categories. They expressed the wider principle that the notice reasonably required varies with the term’s effect. The promoter did just enough: the card clearly referred to rules, the newspaper containing the offer repeated that reference, and the rules were obtainable from the newspaper’s offices or back issues. Rule 5 was incorporated. [23]–[24]

6. Sir Anthony Evans agreed in the result because the trial judge’s factual finding was not clearly wrong. He would otherwise have regarded the notice as inadequate and the rule as sufficiently onerous to require greater prominence. The appeal was dismissed with costs, and permission to appeal to the House of Lords was refused. [25]–[30]

1. Court of Appeal (Civil Division): The appeal was dismissed unanimously in [2001] EWCA Civ 1279. The trial judge’s conclusion that the competition rules were incorporated was upheld.
2. High Court, Queen’s Bench Division: His Honour Judge Hegarty QC dismissed the claimant’s claim, holding that the contract incorporated the promoter’s rules. No citation is stated in the judgment.