L'Estrange v. Graucob

[1934] 2 King's Bench 394Court of Appeal (England)1934Law of Contract I

Rule established

A person who signs a contractual document is bound by its terms, whether or not they have read or understood them, absent fraud or misrepresentation.

Facts

The plaintiff purchased a vending machine, signing a sales agreement without reading its full contents
The agreement contained an exemption clause, in small print, excluding certain warranties
The machine proved defective, and the plaintiff sought to rely on the excluded warranties, arguing she had not actually read or understood the exemption clause
The defendant relied on the clause to exclude liability

Issue

Whether a person who signs a contractual document, without reading its terms, is nonetheless bound by those terms, including an exemption clause.

Held

A person who signs a contractual document is bound by its terms, whether or not they have actually read or understood them
This applies regardless of the print size or prominence of a specific clause, absent fraud, misrepresentation, or a similar vitiating factor
The plaintiff was bound by the exemption clause, since she had signed the document containing it

Ratio Decidendi

Signature on a contractual document constitutes acceptance of its terms as a whole, including terms the signatory did not actually read, absent fraud or misrepresentation. This is the signature rule governing standard form contracts.

How to use it in an exam

Part A: Core authority for the signature rule in standard form contracts.
Part B: Contrast with the reasonable notice requirement applicable where terms are not signed but merely displayed or referenced (Lily White v R Munuswami). Also contrast with Central Inland Water Transport Corp v Brojo Nath Ganguly's unconscionability check on standard form terms.
Key line: "A signatory is bound by contractual terms whether or not actually read."

Source

Source: [1934] 2 KB 394

This is an educational summary, not the judgment itself. Cite the reported version in professional or academic work.

Cited in study notes

Law of Contract IStandard Form of ContractEstablishes the signature rule for standard form contracts