McCutheon v David MacBrayne Ltd – 1964

Legal Case Summary

McCutheon v David MacBrayne Ltd [1964] 1 WLR 125

Notice of term excluding liability for loss at sea; whether knowledge of term established

Facts:

McCutheon handed over his vehicle to a shipping company for transportation from the Hebrides islands to the mainland. The car was destroyed when the ship sank due to the shipping company’s carelessness. The company generally provided customers with a risk note that released them from responsibility for losses caused by their own neglect. McCutheon had signed these notes before but had never read the details. In this instance, no risk note was given and McCutheon attempted to recoup the cost of his car.

Issue and Outcome:

The company argued that the risk note, which included an exclusion clause, was part of the oral contract due to previous business dealings between the parties. They also claimed that the terms of the carriage were clearly displayed in their offices and that McCutheon should have been aware of them since he had signed similar notes in the past. McCutheon argued that he had never read the terms on previous occasions and that the clause could not be applied to the current oral contract. The court ultimately ruled in favor of McCutheon, stating that the clause had not been successfully incorporated into the contract. A previous course of dealing can only bind a party to a term if they have knowledge of it and have agreed to it.

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