The Hitchhiker’s Guide to Consumer Terms & Conditions

One of the themes in The Hitchhiker’s Guide to the Galaxy is the concept of power and bureaucracy. When Arthur Dent discovers his house is at risk of demolition to make way for a bypass it is already too late. While the planning notice had been ‘available’ for nine months, it was “on display in the bottom of a locked filing cabinet stuck in a disused lavatory with a sign on the door saying "Beware of the Leopard"." *

Andrew Green may feel like he had a similar experience. Following a marathon overnight gambling session on Betfred’s ‘Frankie Dettori’s Magic Seven Blackjack’, he accumulated £1,722,500.24 in winnings. However, when he tried to cash out, Betfred told him there had been a software glitch in the game. They refused to pay based on exclusion clauses buried deep within terms and conditions provided to Mr Green over five years before his winning streak. 

Meaning, incorporation and unfairness 

Mr Green claimed Betfred could not rely on those contractual terms largely because of their length, complexity and inaccessibility. The main Terms and Conditions ran to 24 pages of “closely typed” terms, the EULA added a further 9 pages of text and the game rules contained further relevant provisions. 

They were perhaps not as off-putting as the Customer Agreement considered in Spreadex v Cochraine [2012] EWHC which ran to 49 pages of “closely printed and complex paragraphs” meaning that the chance of a consumer actually reading the relevant clause was “close to a miracle”. 

However, the court still described the multiple sets of terms and conditions used by Betfred as “repetitive”, “obscure” and “unclear” with inadequate signposting to significant exclusions of liability and a failure to highlight the meaning and effect. 

Against this backdrop it is unsurprising that Mr Green won on his key points of meaning, incorporation and unfairness. In particular: 

• Meaning – The terms didn’t actually allow payment to be withheld. While there were various rights to withhold payment, they were not applicable. For example, a right to withhold payment as a result of “computer malfunctions” was, in the context of the relevant clause, more aimed at hardware faults or communications failures than the glitch that benefited Mr Green. 
• Incorporation – Even if the terms had that effect, they had not been properly notified and so were not incorporated into this contract (as per Interfoto v Stiletto [1988] 1 All ER 348). While the Court confirmed “click-wrap” can be used to incorporate terms, including adequately drafted and signposted exclusions clauses, Mr Green could not be expected to spend “significant time trawling through documentation, particularly if it is repetitive and not clearly relevant to him”. 
• Fairness – Even if the terms were incorporated, Betfred could not rely on them as they were not clear, fair or transparent as required by the Consumer Rights Act 2015. Betfred also argued that the contract was void for common mistake (i.e. that the game was functioning correctly) but this was rejected as the alleged mistake did not make performance of the contract impossible.

Beware of the Leopard 

Arthur Dent’s house was demolished but in the real-world English law is more protective of consumers. Andrew Green’s success illustrates that limiting access to relevant information through Leopard warnings or long and complex terms may not be effective. 

Care is required when drafting consumer terms and conditions. So far as possible: 

• the terms should ideally be in a single document rather than multiple overlapping agreements; 
• the relevant provisions should be set out concisely and in plain English; and 
• most importantly, the key provisions should be identified and expressly brought to the attention of consumers.

Software glitches

For online platforms, a key provision may be protection against software glitches and malfunctions. Platform operators may have a legitimate reason to protect themselves against the potentially ruinous effect of such a fault and the Court recognised that “click-wrap” can be used to incorporate exclusions clauses so long as they are adequately drafted, signposted and fair.

* This theme repeats shortly afterwards when the Earth is destroyed to build a “hyperspatial express route”. The Vogons explain that plans for that development were on display in Alpha Centauri for fifty Earth years, so the failure to object is very much the fault of the human civilization...