Court of Appeal Decides Camelot's Online Contract Terms Were Incorporated and Not Unfair

Citation: [2024] EWCA Civ 185
Judgment on

Introduction

The case of Joan Parker-Grennan v Camelot UK Lotteries Limited (EWCA Civ 185) presents a nuanced decision from the Court of Appeal concerning the incorporation of standard terms and conditions in online contracts. The case is particularly relevant to online trading and encompasses key issues regarding consumer awareness and the fairness of contract terms in a digital environment.

Key Facts

Joan Parker-Grennan (the Appellant) opened an online National Lottery account with Camelot (the Respondent) in 2009. In 2015, due to a coding error in a new Interactive Instant Win Game (“the Game”), a visual display erroneously indicated that she had won a £1 million prize, while the predetermined outcome generated by the system was only a £10 win. The Appellant contended she had matched the winning numbers as per the game instructions and was entitled to the £1 million prize, principally due to the software issue.

The core legal issues dissected in the case revolve around three pillars:

  1. Whether Camelot’s terms were duly incorporated into the contract between them and the Appellant (“the incorporation issue”).
  2. If the terms were incorporated, were any of them unenforceable under the Unfair Terms in Consumer Contracts Regulations 1999 (“UTCCR”) due to unfairness (“the enforceability issue”).
  3. The contractual interpretation of whether the Appellant had won £10 or £1 million (“the construction issue”).

The court applied a range of legal principles to these issues:

  • Incorporation of Terms in Digital Contracts: The court referred to established rules on incorporation of terms into a contract, assessing whether Camelot did what was reasonably sufficient to bring the terms to the Appellant’s attention. Significantly, the court examined the modified online “click-wrap” procedure employed by Camelot, considering it an efficient method for incorporating terms, provided it affords consumers reasonable notice and opportunity to read these terms.

  • Fairness of Terms under UTCCR: The court considered Clauses 13.3 and 12.1 of the IWG Rules, examining their fairness pursuant to the UTCCR. The ‘significant imbalance’ test and the requirement of ‘good faith’ were scrutinized to determine if these terms produced an unjust advantage to Camelot.

  • Contractual Construction: Interpretation of the “Relevant Contractual Term” and associated game rules underscored that the outcome of the game was predefined and the Appellant could not have won two prizes. The ‘flashing’ indicators were identified as the distinguishing factor necessary to win a prize, affirming the Appellant’s win of only £10.

Key cases of reference include Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd, Green v Petfre (Gibraltar) Ltd t/a Betfred, and Longley v PPB Entertainment Ltd, which provided analogical reasoning on exclusion clauses, fairness, and interpretation.

Outcomes

The court found that Camelot’s terms were incorporated into the contract and they were deemed not to be unfair under UTCCR. The decision was grounded in the premise that reasonable measures were taken to make the Appellant aware of the terms, and the terms themselves were not onerous or obscurely buried within the contract. On the construction issue, the court held that Camelot’s interpretation prevailed, thus the Appellant was entitled only to the £10 prize.

Conclusion

The Court of Appeal’s comprehensive analysis centered on the incorporation of standard terms in online contracts, coupled with the challenge of honoring consumer protection principles within an evolving digital marketplace. The ethos of practicality in contractual dealings, especially in an environment where immediacy and convenience are prized, was evident in the court’s decision. The unanimous judicial consensus fortified the legal landscape around online contracts, setting a precedent for future cases while denoting the importance of clarity, transparency, and the objective interpretation of contractual terms.