Traders providing goods or services online must ensure they sufficiently bring their standard terms and conditions to the attention of their prospective customers to incorporate them into the contract without frustrating them so that they take their custom elsewhere. In the case of Parker-Grennan v Camelot UK Lotteries Limited [2024] EWCA Civ 185, the Court of Appeal have, for the first time, considered the issue of what needs to be done to incorporate standard terms and conditions into a contract for goods or services which is made online.
The Background
Mrs Parker-Grennan, the Appellant, had an online National Lottery Account. In August 2015, Camelot, the licensed operator of the National Lottery, introduced a new game of chance to win a cash prize available to play on its website. The aim of the game was to match any number in the ‘YOUR NUMBERS’ section with a number in the ‘WINNING NUMBERS’ section. On the day the game was launched, Mrs Parker-Grennan played the game, and her screen came up with an image of two flashing number 15s with a message saying, ‘CONGRATULATIONS! You have won £10’. However, she also noticed that there appeared to be two matching number 1s in the upper and lower sections of the screen (although not flashing). She took a screenshot of the page and rang Camelot, telling them she believed she had won £1 million, the top prize to which the number 1 was ascribed. She was informed that the game was not over until she clicked the ‘Finish’ button. When she did so, according to Camelot’s computer her prize was £10 and that was the amount credited to her account. It transpired that Mrs Parker-Grennan had seen the two number 1s due to a software error affecting only 0.24% of the games played during the 36-hour period before it was detected by Camelot.
The Claim
Mrs Parker-Grennan brought proceedings against Camelot claiming the £1 million prize. She argued that the language used in the game details did not negate the possibility of two sets of matching numbers and two prizes being won in a single play. Furthermore, if a software error had led to that conclusion, that was Camelot’s problem, not hers. Camelot relied on a number of terms set out within its various procedures and rules, which it argued were relevant terms of the contract, which made clear that its liability was capped at the £10 prize. In the first instance decision, Mr Justice Jay found in favour of Camelot. Mrs Parker-Grennan appealed that decision and the appeal raised three broad issues:
Were Camelot’s terms incorporated into the contract?
If so, were some of those terms rendered unenforceable?
As a matter of construction of the contract, did Mrs Parker-Grennan win £1 million or only £10?
The Findings
i. Incorporation
The Court confirmed that the legal test to be applied was whether Camelot did what was reasonably sufficient to being the various terms and conditions to the notice of a player of the game. Further, a trader is generally required to signpost ‘onerous’ or ‘unusual’ terms if he wishes to incorporate them – more is required to draw such terms to the notice of customers bound by them than others.
When Mrs Parker-Grennan opened her online account, a box appeared headed ‘Terms and Conditions’ which stated that by ticking the box below she confirmed that she had read, accepted and agreed to be bound by a list of different terms, conditions and rules and the privacy policy, which were available by hyperlinks or drop-down menus. She clicked to tick the box and clicked the ‘confirm’ button. This procedure is known as ‘click-wrap’.
When Camelot’s terms and conditions were updated, the next time Mrs Parker-Grennan accessed her account she would either receive a notification page stating that updates had been made, with a hyperlink to those terms and conditions, or be required to manually accept changes by clicking a button marked ‘Accept’.
The Court held that there were no terms which were particularly onerous and Camelot had done enough to incorporate the relevant terms and conditions into the contract and by adopting the click-wrap procedure, Mrs Parker-Grennan was bound by those terms.
In reaching this decision, Lady Justice Andrews commented that:
‘One cannot force someone to read the terms and conditions if they cannot be troubled to do so. The trader only needs to take reasonable steps to bring the terms and conditions to their attention, which in my judgment necessarily involves giving them a sufficient opportunity to read them. Depending on the facts and circumstances of the particular case, a sufficient opportunity may be afforded by providing a hyperlink to the terms or a drop down menu which the consumer can click (or not) as they choose.’
ii. Enforceability
At the time Mrs Parker-Grennan played the game, the relevant consumer protection legislation which the court applied to consider whether terms were unfair and unenforceable was the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR). These have since been superseded by the Consumer Rights Act 2015 but the Court commented that the provisions of that Act that would have applied if the game had been played today are essentially the same.
As none of the terms had been individually negotiated, the issue was whether any particular term caused ‘a significant imbalance in the parties’ rights and obligations arising under the contract, to the detriment of the consumer’. If so, that term would be regarded as unfair and unenforceable against the consumer.
Lady Justice Andrews’ conclusion was that the relevant terms were enforceable. Within her detailed analysis of UTCCR and the contract terms, she stated that Camelot’s contractual provisions were clearly drafted, readily accessible and well signposted through hyperlinks.
iii. Construction
Lady Justice Andrews concluded that on a true construction of the contract, Mrs Parker-Grennan had only won £10 and not £1 million. The Appellant was wrong to treat the phrase ‘Match any of the WINNING NUMBERS to any of YOUR NUMBERS to win PRIZE’ as the only contractual term, when plainly it was not. Camelot’s ‘Game Procedures’ clearly set out that the two matching numbers would have to turn white and flash, the amount of the win would have to appear in the message at the top of the Game Display Screen and that a player needed to click the ‘Finish’ button to complete the game. Moreover, the application of the ‘IWG Rules’ meant that the Appellant was bound by the outcome recorded on Camelot’s official list of Winning Plays (which was a win of £10).
In her introduction she pointed out that the answer to this issue obviates the necessity to answer either of the other questions. However, recognising that the Court of Appeal had not considered the issue of incorporation of standards terms and conditions into contracts made online before, she addressed these issues in her judgment.
Conclusion
This case has highlighted the complexity of balancing the needs of traders to publicise their terms and conditions with the needs of consumers to access and understand those terms. BDB Pitmans can assist online traders in drafting or reviewing their terms and conditions and processes to help ensure this balance is met. If you would like our assistance please contact our commercial contracts team. Alternatively, if a customer is disputing your terms and conditions, or you would like to challenge a company’s terms and conditions, please contact Sophie Squire.
