The recent High Court decision highlights the importance of Terms and Conditions (T&Cs) that are written in plain English and effectively brought to the attention of any consumer prior to signing. As demonstrated by this case, properly incorporated and valid T&Cs are crucial when disputes regarding the contract arises.

A false win of £1,000,000

In 2015, Mrs Parker-Grennan won £10 by playing an instant win game owned by the Defendant, Camelot. The game requires a player to match their own number with any of the winning numbers. A win would be signalled by both winning numbers being highlighted in the game. Each matched number holds a different prize value. Due to a coding error in the system, Mrs Parker-Grennan noticed that she had not only matched numbers representing a £10 win (with numbers duly highlighted) but she had also matched a second set of numbers, which correlated to the £1 million prize. This set of numbers was not highlighted. In addition, the notification which popped up at the end of the game showed only the £10 prize as having been won.

Mrs Parker Grennan attempted the claim the £1 million prize money. Camelot refused to pay out relying on their T&C's which stated that they could "declare a Play invalid (and will not be obligated to pay any Prize… if the outcome of a play is displayed on the Game Play Window is inconsistent with the result of that Play as predetermined by [the National Lotteries'] computer system". Mrs Parker-Grennan had consented to Camelot's T&Cs when she opened her online account by ticking a box which confirmed that she agreed to these terms. Camelot argued that the proper interpretation of the terms featured on their website meant that the animated gameplay had no impact on subsequent winnings. Mrs Parker Grennan sought to rely on the game details screen which clearly stated: "Match any of the WINNING NUMBERS to any of YOUR NUMBERS TO WIN THE PRIZE".

The Court of Appeal Decision

After being unsuccessful in her first claim against Camelot at the High Court, Mrs Parker-Grennan appealed her decision arguing that she was entitled to the £1 million win on the basis that the relevant contractual term were the words stated on the screen: "Match any of the Winning Numbers". Mrs Parker-Grennan considered this to be the only contractual term and argued that the T&Cs that she had signed when she opened her account with Camelot could not be relied on as they were not incorporated into the contract and notwithstanding this, were unfair under the Unfair Terms in Consumer Contracts Regulations 1999 (UTCCR).

The Court of Appeal agreed that on interpretation of the game instructions, a player was able to win twice, and it was possible that Mrs Parker-Grennan could have won the £10 and £1 million despite this being unintended by Camelot. Despite this, Mrs Parker-Grennan was not entitled to the £1 million prize fund. Camelot had effectively incorporated their T&C's into the contract and could rely on these to deny Mrs Parker-Grennan the £1 million prize. The Court of Appeal addressed the three issues in dispute as follows:

(1) Incorporation of website terms

    The Court considered whether the T&Cs (accepted when Ms Parker-Grennan first opened her account) were validly incorporated into the contract.

    Camelot's T&Cs were accessible via a series of hyperlinks and drop-down menus displayed when a player opened an account with Camelot. Whenever Camelot made changes to its T&Cs, players were notified when they accessed their National Lottery account with a message that updates had been made to the account terms. The Court of Appeal held that this was sufficient to have incorporated the terms by link and that it was not necessary that Camelot's system required players to scroll through the T&Cs before being able to accept them.

    It was then considered whether greater attention needed to be brought to the term which allowed Camelot to cancel a prize if there was a software error in the game. It is established law that a company must signpost any onerous or unusual terms in a contract to its consumers for it to be valid. Lady Justice Andrews held that the ability to cancel a prize due to a technical error in the game was not onerous and it would be reasonable to expect a company to refrain from paying a prize fund if there were technical errors. As such, this clause did not need to be specifically highlighted or drawn to the attention of Mrs Parker-Grennan.

    (2) Are the terms unfair?

      The Court then considered whether the ability to cancel a prize was unfair under the UTCCR and accordingly, void.

      In her judgement, Lady Justice Andrews referred to the requirement to consider the nature of the services for which the contract is concluded and the circumstances of the conclusion of the contract, as well as other terms within the contract when considering whether a term was unfair. Taking this into account, it was held that Camelot's T&Cs were clearly drafted, and well signposted with hyperlinks. Camelot were entitled to have terms regarding the validation process of whether a prize had been won and as such, the terms were not unfair under the UTCCR.

      (3) Construction

        Taking the above into consideration, the Court of Appeal considered whether on the proper interpretation of the contract terms, Mrs Parker-Grennan had won £10 or £1 million. Counsel for Mrs Parker Grennan said that the rules of the game stated that if you matched any of the winning numbers with your own, you had won a prize. Lady Justice Andrews, however, disagreed stating that this was not the only contractual term and the game stated that along with matching the numbers, the lights would have to flash on both of the winning numbers, which in this case they had not. These instructions were clearly set out when any player started the game, and the reasonable player would have understood this when playing the game. Alongside the T&Cs which Mrs Parker-Grennan had signed when she opened her account, it was reasonable in all circumstances to deny Mrs Parker-Grennan the £1 million prize.

        This case is a useful reminder of the importance of properly incorporating your T&Cs into your contracts and ensuring that terms are fully enforceable by drafting them in plain accessible and logical English so that they can be understood by the average consumer.

        In the judgment, it was noted that there may be situations in which T&Cs which could be accessed from a drop-down menu would not be sufficient to incorporate the terms, for example, if there was a time limit placed on consumers to read the T&Cs or where they referred to multiple different hyperlinks in order to find the correct terms, reminding businesses that this issue of incorporation will be decided on a case by case basis.

        As of now, consumer law in respect of effective incorporation and unfair terms for online contracts has not departed from the law in respect of contracts signed on paper in wet ink. We consider the issue of T&Cs and their effective incorporation will continue to be a key issue for businesses contracting with consumers in 2024. Indeed, Lady Justice Andrews suggested in her decision that a full review by the Law Commission of this area of the law would be welcomed.

        If you have any questions in relation to the above or in relation to Terms and Conditions more generally, please get in touch with Alison Bryce, Rebecca Ronneyor your usual Brodies contact.

        Contributors

        Alison Bryce

        Partner

        Rebecca Ronney

        Associate

        Clara Wilson

        Trainee solicitor