Caveat Emptor: A Legal Principle Dictating Buyer’s Responsibility in Contractual Agreements – L’Estrange v Graucob Case

what is the case that shows a party not having expressed knowledge of the clause?

olley v marlborough court hotel (1949)- couple booked and paid for hotel at reception (contract formed). things were stolen from their room but a sign in their room said that the hotel is not responsible for things stolen. the court held the exclusion clause was communicated too late to be a part of the contract.

The case that shows a party not having expressed knowledge of the clause is the case of L’Estrange v Graucob (1934).

In this case, a woman signed a contract to purchase a cigarette vending machine from the defendant. The contract contained a clause which excluded all other warranties and representations except those expressly stated in the contract. However, the woman did not read the clause before signing the contract, and the defendant did not bring it to her attention or explain its meaning to her.

Later, the vending machine turned out to be defective, and the woman sued the defendant for fraud and misrepresentation. However, the court upheld the validity of the exclusion clause, stating that by signing the contract, the woman had agreed to its terms regardless of whether she had read or understood them.

The court held that the clause was incorporated into the contract, and the defendant was therefore not liable for any implied warranties or representations. This case established the principle of “caveat emptor” or “buyer beware”, which means that a buyer is responsible for knowing the terms of the contract they are signing.

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