DATE DOWNLOADED: Sat Jan 27 15:13:47 2024

SOURCE: Content Downloaded from HeinOnline

Citations:
Please note: citations are provided as a general guideline. Users should consult their preferred
citation format's style manual for proper citation formatting.

Bluebook 21st ed.

J. R. Spencer, Signature, Consent, and the Rule in L'estragne v. Graucob, 32
CAMBRIDGE L.J. 104 (1973).

ALWD 7th ed.

J. R. Spencer, Signature, Consent, and the Rule in L'estragne v. Graucob, 32
Cambridge L.J. 104 (1973).

APA 7th ed.

Spencer, J. R. (1973). Signature, consent, and the rule in l'estragne v. graucob.
Cambridge Law Journal, 32(1), 104-122.

Chicago 17th ed.

J. R. Spencer, "Signature, Consent, and the Rule in L'estragne v. Graucob," Cambridge
Law Journal 32, no. 1 (April 1973): 104-122

McGill Guide 9th ed.

J. R. Spencer, "Signature, Consent, and the Rule in L'estragne v. Graucob" (1973)
32:1 Cambridge LJ 104.

AGLC 4th ed.

J. R. Spencer, 'Signature, Consent, and the Rule in L'estragne v. Graucob' (1973)
32(1) Cambridge Law Journal 104

MLA 9th ed.

Spencer, J. R. "Signature, Consent, and the Rule in L'estragne v. Graucob." Cambridge
Law Journal, vol. 32, no. 1, April 1973, pp. 104-122. HeinOnline.

OSCOLA 4th ed.

J. R. Spencer, 'Signature, Consent, and the Rule in L'estragne v. Graucob' (1973) 32
Cambridge LJ 104 Please note: citations are provided as a general
guideline. Users should consult their preferred citation format's style manual for
proper citation formatting.

-- Your use of this HeinOnline PDF indicates your acceptance of HeinOnline's Terms and
Conditions of the license agreement available at
https://heinonline.org/HOL/License
-- The search text of this PDF is generated from uncorrected OCR text.
-- To obtain permission to use this article beyond the scope of your license, please use:
Copyright Information
Cambridge Law Journal, 32 (1), April 1973, pp. 104-122
Printed in Great Britain.

SIGNATURE, CONSENT, AND THE RULE

IN L'ESTRANGE v. GRAUCOB

J. R. SPENCER

IT seems to be generally accepted that a person who signs a con-

tractual document may not dispute his agreement to any of the
terms which it contains, unless he can establish one of three defences:
(a) fraud, (b) misrepresentation, or (c) non est factum. 1
The case which is usually taken to be authority for this proposi-
tion is the decision of the Divisional Court 2 in L'Estrange v.
F. Graucob Ltd.,' in which Scrutton L.J. said 4: "Where a document
containing contractual terms is signed, then, in the absence of fraud,
or, I will add, misrepresentation, the party signing it is bound, and
it is wholly immaterial whether he has read the document or not,"
and where Maugham L.J. said much the same, but added the further
possibility of a plea of non est factum.5 In fact, the rule was laid
down four years earlier and with greater authority by the Court of
Appeal in Blay v. Pollard and Morris,6 and there is a first instance
decision to similar effect eight years earlier still-The Luna.7 Neither
of these cases was cited or relied on in L'Estrange v. Graucob, where
the court based the rule solely on a dictum of Mellish L.J. in Parker
v. South Eastern Railway Co.,8 which is probably its original source.
However, even if L'Estrange v. Graucob is not its real origin, it was
that case which made the rule famous-or infamous. The facts of
the case were hard enough to attract public attention, 9 and the
application of the rule in that case to standard form contracts showed

1Sutton and Shannon on Contracts, 7th ed., p. 106; Cheshire and Fifoot, The
Law of Contract, 8th ed., p. 129; Salmond and Williams on Contracts, p. 79.
2 It was a decision of the Divisional Court, with Scrutton and Maugham L.JJ.
sitting as additional judges in the King's Bench Division. It is often mistaken
for a decision of the Court of Appeal, e.g., McCutcheon v. MacBrayne [1964]
1 W.L.R. 125 at p. 134, per Lord Devlin, quoted post, p. 1.17. This has probably
given the case a weight of authority it does not really possess.
3 [1934] 2 K.B. 394.
4 Ibid. at p. 403.
5 Ibid. at p. 406.
6 [1930] 1 K.B. 628.
7 [19201 P. 22.
8 (1877) 2 C.P.D. 416 at p. 421. The court also referred to Roe v. Naylor (No. 2)
(1918) 87 L.J.K.B. 958, which contains similar dicta. See 87 L.J.K.B. 958 at
p. 964, per Scrutton L.J.
9 It was described as "a menace to the community " by P. A. Landon in his note
on the case, 51 L.Q.R. 272. The author is indebted to this case-note.
104
C.L.J. The Rule in L'Estrange v. Graucob

how wide its potential effect would be."° So it is good sense, even
if it is bad legal history, to refer to the rule as "the rule in L'Estrange
V. Graucob," and that is what it will be called in this article.
Is the rule in L'Estrange v. Graucob right? Is a person who
disputes the terms of a signed contract really limited to the three
defences of fraud, misrepresentation and non est factum? An
attempt will be made here to show that the rule is wrong, and that
there is a fourth defence which ought to be open to him-the defence
that he simply did not agree to the term in question. The rule will
be attacked on the ground that it contradicts the settled theory of
agreement which underlies the law of contract generally.

THE COMMON LAW THEORY OF AGREEMENT

Everyone says that the common law theory of agreement is

"objective," which means that the parties have to be judged by what
they outwardly appeared to decide rather than by what they inwardly
meant to decide. This is vague, however, and to see what this
"objective" theory really is we must look at the cases upon which
it is based.
One of these cases is Smith v. Hughes.1 1 The case usually features
in books in the chapter headed "mistake" rather than in the one
headed "agreement." However, when the common law deals with
the sort of mistake where P thought the terms of the contract to be
ABC and D thought them to be XYZ-what Cheshire and Fifoot
call "mutual " and " unilateral " mistake 1 -it solves the problem
by asking which set of terms (if any) are those to which, as a matter
of law, the parties agreed. In other words, mistake is often no more
than the other side of agreement.1" So Smith v. Hughes is an
authority quite as relevant to agreement as it is to mistake.
The facts of Smith v. Hughes are well known. P delivered some
oats he claimed to have sold to D, who refused to pay for them
because he said that he had not agreed to buy the kind of oats which
P had sent him. The case was heard in the county court before a
jury, which found for D. P then appealed to the Court of Queen's
Bench on the ground that the county court judge's direction to the
jury on the question of agreement had been defective. The Court of
Queen's Bench thought that the judge had misdirected the jury, and

10 The Supply of Goods (Implied Terms) Bill will greatly reduce the effect of
L'Estrange v. Graucob as regards contracts for the sale and supply of goods,
although the general problem of onerous terms in signed contracts, especially
those in standard form, will still remain.
11 (1871) L.R. 6 Q.B. 597.
12 The Law of Contract, 8th ed., pp. 202-203.
13 Slade, "The Myth of Mistake in the English Law of Contract," 70 L.Q.R. 385;
Atiyah, Introduction to the Law of Contract,2nd ed., p. 49.
 The Cambridge Law Journal [1973)
ordered a new trial, having first laid down what his direction should
have been. Blackburn J.'s statement is particularly famous.
I apprehend that if one of the parties intends to make a contract
on one set of terms, and the other intends to make a contract on
another set of terms, or, as it is sometimes expressed, if the parties
are not ad idem, there is no contract, unless the circumstances are
such as to preclude one of the parties from denying that he has
agreed to the terms of the other. The rule of law is that stated
in Freeman v. Cooke. 4 If, whatever a man's real intention may
be, he so conducts himself that a reasonable man would believe
that he was assenting to the terms proposed by the other party,
and that other party upon that belief enters into the contract
with him, the man thus conducting himself would be equally
bound as if he had intended to agree to the other party's terms."5
According to Smith v. Hughes, then, the "objective" test of
agreement means this. Words are to be interpreted as they were
reasonably understood by the man to whom they were spoken, not
as they were understood by the man who spoke them. Thus if A
went to an auction, and being unused to the ways of the country
and unable to appreciate the finer points of distinction between a
cow and a bull, bid for B's bull under the impression that it was a
cow that B was contracting to sell him, there would be a contract
between A and B for the purchase and sale of a bull. Although the
minds of the parties did not meet, A has misled B into thinking that
he was offering to buy his bull. A is therefore not allowed to go
back on the impression he has created, because it would be unfair to
B to enable him to do so.16
However, there are at least two cases where it is fair to B to
allow A to deny his apparent consent.
(i) It is fair to allow him to do so if B knew, or ought to have
known, 7 that A was mistaken. In this case, B has not been misled
by any appearance of consent in A, so there is no reason why A
should not be allowed to say that the minds of the parties did not

'4 (1848) 2 Ex. 654; 154 E.R. 652. Freeman v. Cooke has nothing to do with
contract. The court, however, expounded estoppel in general terms, and this
exposition was picked up and applied to a contract case, first in Cornish v.
Abington (1859) 4 H. & N. 549; 157 E.R. 956, and again in Smith v. Hughes.
15 (1871) L.R. 6 Q.B. 597 at p. 607.
"6 Cf. Gill v. McDowell [-1903] 2 I.R.K.B. 463, where a hermaphrodite was
mistaken for either a bullock or a heifer, it is not clear which, and Thwaites v.
Morrison (1918) 14 Alta.Rep. 8, where a stallion was mistaken for a gelding.
If nothing else, these two cases show that no imaginary example can ever be
more improbable than one from real life.
' Singleton J.'s judgment in Hartog v. Colin and Shields, inIra, appears to cover
both the cases where B had actual knowledge of A's mistake and the case where
he had constructive knowledge only. He said: " The plaintiff could not reason-
ably have supposed that the offer contained the offeror's real intention."
C.L.J. The Rule in L'Estrange v. Graucob

really meet.18 Thus if B knew that A did not really mean to bid for
B's bull, A is not bound by a contract to buy it."0 For example, in
Hartog v. Colin and Shields 20 D offered P 30,000 skins at prices per
pound when he meant to offer to sell at prices per piece. P accepted
the offer, well knowing that D had made a mistake and that the prices
he appeared to offer were much lower than the prices he intended
to offer. The court refused to give P damages for breach of contract.
(ii) It is also fair to allow A to deny his apparent consent if it
was really B's fault that A appeared to agree to something he did
not. Thus if before the sale, B in some way confused A, and as a
result of this A bid for the bull in the belief that it was a cow, then
A will also be allowed to plead his mistake, and will not be bound
to accept and pay for B's bull." Thus in Scriven v. Hindley,22 D
bid at an auction for a lot which he believed to be bales of hemp,
whereas P meant to sell him bales of tow, which were worth much
less. D's mistake was, however, partly due to P's confusing
arrangement of the lots. P's action for the price failed, the court
holding that a contract "cannot arise when the person seeking to
enforce it has by his own negligence or by that of those for whom
he is responsible, caused, or contributed to cause, the mistake." The
case is a strong one, since there was also an express finding that D
himself was also careless.
18 Smith v. Hughes (1871) L.R. 6 Q.B. 597 at p. 610, per Hannen J.; Gill v.
McDowell, supra; London Holeproof Hosiery v. Padmore (1928) 44 T.L.R. 499;
Hitchman v. Avery (1892) 8 T.L.R. 698 (discussed post, p. 121); cf. Ewing &
Lawson v. Hanbury & Co. (1900) 16 T.L.R. 140.
19 As in Gill v. McDowell, supra, where the court found that A intended to buy
either B's heifer or his bullock (it is not clear which), that B intended to sell
his hermaphrodite, and that B well knew A to be mistaken as to what he was
buying. The court therefore held the contract to be void. On the facts as
found, the decision is undoubtedly correct. One wonders, however, whether
the facts were not really as found, but rather that A was buying a specific
animal, wholly indifferent as to its sex, if any. Had these facts been found, there
ought to have been a valid contract, because the parties would then have been
perfectly ad idem.
20 [19391 3 All E.R. 566.
21 In Gill v. McDowell, supra, the seller put the animal, itself " a sort of living

lie " [19031 2 I.R.K.B. 463 at p. 469, per Gibson J., among other animals which
were either bullocks or heifers, so that its peculiarity was concealed. Cf. Roe v.
Naylor (No. 1) [19171 1 K.B. 712. For a case in equity, see Torrance v. Bolton
(1872) 8 Ch.App. 118.
22 [19131 3 K.B. 564. The case has suffered bad mangling at the hands of those
who wish to make it fit their theory. In Principles of the Law of Contracts, by
Salmond and Winfield, p. 179, it was wrongly explained as turning on the fact
that the auctioneer knew the purchaser was mistaken (which he did not). This
was corrected when the book re-emerged as Salmond and Williams on Contracts
(p. 209). Cheshire and Fifoot explain the decision as one where " the evidence
is so conflicting that there is nothing sufficiently solid from which to infer a
contract in any final form without indulging in mere speculation," so that the
court must " of necessity declare that no contract whatsoever has been created "
(8th ed., p. 222). This, with respect, is also misleading.
 The Cambridge Law Journal [1973]

A RIVAL THEORY OF AGREEMENT

The notion behind what has been said so far is that A's words must
be judged as they appeared to B, the person to whom they were
directed. There is nothing new or original in this: in fact, it has
been repeated so often in the past 23 that some readers may wonder
why it has been necessary to labour the point. The reason is that in
recent years an even more objective theory of agreement has
emerged, according to which A's words must be judged, not as they
appeared to B, but as they would have appeared to C, a reasonable
man eavesdropping on the negotiations. The test is not what the
other party would have thought, but how things would have appeared
to the reasonable fly on the wall. This rival theory has begun to
gain ground at the expense of the more orthodox theory which we
have just examined, and it is time we examined it closely to see
what its implications are.
In some cases, the two theories produce the same results. Thus
according to either theory, the unobservant A will usually be bound
to buy the bull he bid for thinking it was a cow; if the Smith v.
Hughes theory is used, this is because A led B to believe A was
contracting to buy a bull; if the later theory is used, it is because a
reasonable bystander would have thought A was contracting to buy
a bull. On these facts, it makes no difference which theory is used-
"you pays your money and you takes your choice." However, the
theories produce conflicting results in cases like Hartog v. Colin and
Shields and Scriven v. Hindley, where A's mistake was either known
to B, or partly the fault of B. According to the Smith v. Hughes
theory, there is no contract at all in these cases.2 4 According to the
more objective "fly on the wall" theory, however, there is a contract
in both these cases. No matter how things appeared to B, the parties
appeared to be in agreement to the reasonable eavesdropper, C. So
the protagonists of this theory would say that there ought to have
been a valid contract in both Hartog v. Colin and Shields and in
Scriven v. Hindley, despite what the courts in each case said.25 They
would explain the result reached in these two cases by saying that in
this sort of situation the court may set the contract aside "on
equitable grounds "-in the opinion of most lawyers, a very dubious
proposition.2"
23 Treitel, The Law of Contract, 3rd ed., p. 1; Salmond and Williams on Contract,
Chap. V; Smith and Thomas, A Casebook on Contract, 4th ed., pp. 3-4; Slade,
op. cit., 70 L.Q.R. 385. 24 Ante, p. 106.
25 In Solle v. Butcher, infra, Denning L.J. said that nowadays the contract in
Smith v. Hughes would be held voidable only, and likewise the contract in
Cundy v. Lindsay (1876) 1 Q.B.D. 348; (1877) 2 Q.B.D. 96; (1878) 3 App.Cas.
459. Sed quaere.
26 Slade, " The Myth of Mistake in the English Law of Contract," 70 L.Q.R. 385,
390, 396. Torrance v. Bolton (1872) 2 Ch.App. 118 lends some support to this
 C.L.J. The Rule in L'Estrange v. Graucob

The dissemination of the "fly on the wall" theory of agreement

appears to be largely the work of Lord Denning M.R. 21 In Solle v.
Butcher 28 he said
once a contract has been made, that is to say, once the parties,
whatever their inmost states of mind, have to all outward
appearances agreed with sufficient certainty in the same terms on
the same subject-matter, then the contract is good unless and
until it is set aside for failure of some condition on which the
existence of the contract depends, or for fraud, or on some equit-
able ground. Neither party can rely on his own mistake to say
it was a nullity from the beginning, no matter that it was a
mistake which to his mind was fundamental, and no matter that
the other party knew that he was under a mistake.29
To support this theory, Denning L.J. invoked the authority of the
House of Lords in Bell v. Lever Bros." It is hard to criticise him
for taking this view of Bell v. Lever Bros.; it would, however, be
equally hard to criticise him for taking any other view of Bell v.
Lever Bros. "The case is, of course, a final authority for whatever
it decides, but there has been considerable discussion as to what
this is." 21 The real origin of the "fly on the wall" theory appears
to be not the House of Lords, but Williston.2 He loudly proclaimed
an extreme "objective" theory of consent, which has had wide
influence on legal thinking in the United States, and which is reflected
to some extent in the American Law Institute's Restatement of the
3
Law of Contract. 3
view. The court rescinded a contract which a man had made at an auction
because he mistook what he was buying, the mistake being partly the fault of
the vendor who had prepared misleading particulars of sale-the facts being
very similar to Scriven v. Hindley. But the fact that a court of equity granted
rescission does not exclude the possibility that the contract would, like Scriven
v. Hindley, have been void at common law: Cooper V. Phibbs (1867) L.R. 2
H.L. 149 appears to be a case in which the courts of equity "rescinded" a
contract void at common law.
27 Solle v. Butcher, infra. Denning L.J. approved his own views there expressed
in Leaf v. International Galleries [1950] 2 K.B. 86, 89, and applied them in
Rose (Frederick E.) (London) Ltd. v. Pim (Wm. H.) Junior & Co. Ltd. [1953]
2 Q.B. 450, 460. See also Gallie v. Lee [1969] 2 Ch. 17, 33 (affirmed sub nom.
Saunders v. Anglia Building Society [1971] A.C. 1004), and Lewis v. Averay
[19721 1 Q.B. 198. 28 [1950] 1 K.B. 671 at p. 691.
29 Author's italics.
20 [1932] A.C. 161.
31 Anson's Law of Contract, 23rd ed., p. 261.
32 Williston on Contracts, ss. 1536, 1537. Williston, " Mutual Assent in the
Formation of Contracts" (1919) 14 Illinois Law Review, p. 85, reprinted in
Selected Readings on the Law of Contracts (New York), p. 119. Williston's
views are not universally accepted in the U.S.A. See Corbin on Contracts, s.
106, where they are strongly refuted; and Rickett v. Pennsylvania Railroad Co.,
153 F. 2d 757. Williston himself admitted that his theory did not square with
English cases so well as with those from his own country--see his article, supra,
at p. 120.
33 ss. 70 and 71, especially 71 (c), Illustration (2). But the theory set out in the
Restatement is not so extreme as that of Lord Denning, since it accepts that no
contract is concluded in a case like Hartog V. Colin and Shields-see s. 71 (c).
 The Cambridge Law Journal [1973]

Indeed, so far from being based on English case law, the "fly
on the wall" theory goes against the English cases almost without
exception. For a start, it does not fit with Smith v. Hughes-as
Denning L.J. himself admitted in Solle v. Butcher.14 Yet Snith v.
Hughes has been approved and applied time out of number, both in
general terms,"5 and on the test of consent which it laid down."6 It
has been accepted as authoritative in Canada " and Australia.3" It
is also interesting to note that Smith v. Hughes was approved by
Lord Atkin in Bell v. Lever Bros., the case on which the "fly on the
wall" theory is supposedly based. Furthermore, if the "fly on
the wall" theory is correct, then Hartog v. Colin and Shields is
wrong, or must be explained on other grounds, and the same must go
for all the other cases where, although the parties were outwardly
agreed, the court held there to be no contract because A knew B to
have misunderstood the terms of the bargain.3 9 Lastly, Cundy v.
Lindsay 40 and the other mistaken identity cases do not fit well with
the "fly on the wall" theory. Denning L.J. accepted this in Solle
v. Butcher, and got around the difficulty by saying that a modern
court would therefore not hold the contract in Cundy v. Lindsay to
be void, but only voidable. With due respect, this is to look through
the wrong end of the telescope. If the theory does not square with
one of the best known decisions of the House of Lords in the last
hundred years, surely it is the theory rather than the decision of the
House of Lords which is wrong!
Are there any English cases which do support the "fly on the
wall" theory of agreement?
There is the line of cases starting with Solle v. Butcher " in which
Lord Denning has repeated the theory several times over. In all of
34 [1950] 1 K.B. 671 at p. 693.
•5 Pope & Pearson v. Buenos Aires New Gas Co. (1892) 8 T.L.R. 758.
36 London Holeproof Hosiery v. Padmore (1928) 44 T.L.R. 499; Sullivan v.
Constable (1932) 48 T.L.R. 369; Ewing & Lawson v. Hanbury & Co. (1900) 16
T.L.R. 140; Hitchman v. Avery (1892) 8 T.L.R. 698. See also the following
cases, which were decided on the Smith v. Hughes theory of agreement, but
without reference to the case itself: Cornish v. Abington (1859) 4 H. & N. 549;
157 E.R. 956; Harris v. Great Western Railway (1876) 1 Q.B.D. 515 and
Tamplin v. James (1880) 15 Ch.D. 215.
'7 Riley v. Spottswood (1873) 23 U.C.C.P. 318; Lindsay v. Heron (1921) 50 O.L.R.
1; Colonial Investment Co. of Winnipeg v. Borland (1911) 1 W.W.R. 171;
(1912) 2 W.W.R. 960. Cf. Hobbs v. Esquimalt and Nanaimo Ry. (1899) 29
S.C.R. 450.
38 Goldsborough Mort & Co. v. Quinn (1910) 10 C.L.R. 674, 695; Cheshire and
Fifoot, The Law of Contract, 2nd Australian edition, p. 333.
39 London Holeproof Hosiery v. Padmore (1928) 44 T.L.R. 499; Gill v. McDowell

[1903] 2 I.R.K.B. 463; Hitchman v. Avery (1892) 8 T.L.R. 698; cf. Ewing &
Lawson v. Hanbury & Co. (1900) 16 T.L.R. 140.
40 (1876) 1 Q.B.D. 348; (1877) 2 Q.B.D. 96; (1878) 3 App.Cas. 459.
41 Leaf v. International Galleries [1950] 2 K.B. 86; Rose v. Pim [1953] 2 Q.B.
450; Gallie v. Lee [1969] 2 Ch. 17 (affirmed sub nom. Saunders v. Anglia
Building Society [1971] A.C. 1004); Lewis v. Averay [1972] 1 Q.B. 198.
C.L.J. The Rule in L'Estrange v. Graucob

these cases except one, the "fly on the wall" theory of agreement
was not essential to the decision, which turned on points which had
little or nothing to do with agreement at all 42; thus what was said
about agreement there was only obiter dicta. The exceptional case is
Rose (Frederick E.) (London) Ltd. v. Pim (Wm. H.) Junior & Co.
Ltd.," which could have gone the other way had a different theory of
agreement been applied to the facts. And this case can also be
explained on other grounds. 4
Apart from these cases in which Lord Denning was involved,
there seems to be only one case which can be used to support the
"fly on the wall" theory of agreement, and that is Upton-on-Severn
R.D.C. v. Powell.45 D was entitled to the free services of the fire
brigade in whose area he lived, whereas he could have the services
of the fire brigade in adjoining areas only if he paid for them.
Believing that he lived in the Upton fire brigade area he called the
Upton fire brigade, which came to the fire, also believing that D
lived in their area. D meant to call a free service, the P fire brigade
meant at the time to give him one. Neither party intended to make
a contract at all, and neither side discovered that D really lived in
another fire brigade area, and so was not entitled to the free services
of the P fire brigade, until afterwards. Nevertheless the Court of
Appeal held D was contractually bound to pay for the services P
had rendered him. The case could be explained by saying that
although neither P nor D intended to make a contract, the reasonable
eavesdropper, C, would have assumed that they did: therefore there
was in law a contract between them. However, this explanation
does not feature in Lord Greene M.R.'s single-page judgment. In
fact, no explanation at all is given in the judgment, which appears to
be most singularly innocent of any "ratio decidendi." All that
clearly emerges is that the court was most annoyed with Powell, who,
it thought, was trying to get something for nothing. This suggests
that the case is best relegated from the law of contract altogether,
and seen as one where the court gave a restitutionary remedy

42 In Solle v. Butcher there was no dispute as to what the parties had agreed-the
question was whether the court could relieve P on account of a mistake of fact
which was shared by both parties. Leaf v. International Galleries turned on
rescission for misrepresentation, and everything that is said about agreement is
clearly obiter. Gallie v. Lee is a non est factum case pure and simple, and was
so treated by the House of Lords when it affirmed the decision sub nom.
Saunders v. Anglia Building Society [19711 A.C. 1004. In Lewis v. Averay
the other members of the Court of Appeal held that there had been a mistake of
attributes, not of identity, and assumed that the contract would have been void
had there been a mistake of identity, however the transaction would have
appeared to the " reasonable fly on the wall."
43 [19531 2 Q.B. 450.
44 Post, n. 56.
45 119421 1 All E.R. 220.
 The Cambridge Law Journal [1973]

to prevent unjust enrichment through services rendered under a

mistake."1
Not only is the "fly on the wall" theory of agreement
apparently
contrary to authority, it is often difficult and uncertain to apply. It
will work well enough where the parties are negotiating face to face.
Then the reasonable eavesdropper is notionally at the keyhole,
enthusiastically drawing inferences from what he hears within. But
what if one of the parties is at Land's End and the other at
Llandudno? At whose keyhole is the reasonable eavesdropper notion-
ally listening then?-at the offeror's, or at the offeree's-or has he ears
on infinitely extensible leads, enabling him to apply one to each
keyhole simultaneously? The difficulty is that the inference he will
draw will depend on how much he knows, and what he will know will
often depend on where he is. Furthermore, unless Solle v. Butcher
has reversed a long line of cases, the reasonable eavesdropper will
need a good deal of specialised and esoteric knowledge. He must
have overheard all the previous negotiations,"7 he will need to know
all the ships sailing from Bombay to Liverpool, 4" he will need to be
an expert in cracking codes,' 9 and if we bring other Canadian cases
into consideration, he will have to understand fluent German,5"
Ukrainian "1and Finnish.5 2 In the law of tort the reasonable man
has to be imbued with qualities which are said to include the agility
of an acrobat and the foresight of a Hebrew prophet.53 To fit him
for his new role as the eavesdropper in the law of contract, " this
excellent but odious creature" 14 will also need the omnipresence of
Puck and the learning of the Encyclopaedia Britannica. These diffi-
culties arise from importing the fiction that a third party is listening
to the negotiations when he is not, and they disappear if we abandon
that fiction. We run into all sorts of difficulties if we ask ourselves
"how would C, overhearing A and B's negotiations, have interpreted
them?" which never arise if we ask the more sensible question, "How
should B, the other party, have interpreted what A said? "
The "fly on the wall " theory is also open to the objection that
it leads to absurd results. What happens if the parties are inwardly
agreed, but outwardly at variance, or agreed on something else?
46 See Stoijar, Quasi-Contract, p. 186; Wade, Restitution, Cases and Materials
(U.S.A.), 2nd ed., p. 108. Although Anson's Law of Contract, 23rd ed., pp.
30, 280, goes into the case, neither Treitel nor Cheshire and Fifoot think it is
worth attention.
47 Lindsay v. Heron (1921) 50 O.L.R. 1.
49 Raffles v. Wichelhaus (1864) 2 H. & C. 906; 159 E.R. 375.
49 Falck v. Williams [1900] A.C. 176.
50 Streimer v. Nagel (1909) 11 W.L.R. 325 (Man.).
a1 Free Ukranian etc. Credit Union v. Hnatkiw (1961) 44 D.L.R. (2d) 633 (Ont.).
52 Freeman v. Kaltio (1963) 39 D.L.R. (2d) 496 (B.C.).
53 Lord Bramwell, quoted in Winfield and Jolowicz on Tort, 9th ed., p. 26, n. 24.
4 A. P. Herbert, Uncommon Law.
C.L.J. The Rule in L'Estrange v. Graucob

Suppose, for example, that Ali and Benedetto, two immigrants with
little knowledge of English, agree on the purchase and sale of a
"bull," both of them intending to deal with a cow, and in the belief
that the word "bull" means the female of the species. According
to the "fly on the wall" theory of agreement, they have made a
contract to buy and sell a bull, although A does not want one and B
has not got one to sell. 5 This is ridiculous. Yet this is the result
reached in the Court of Appeal by Denning L.J. in Rose v. Pim. 8
The facts as interpreted by Denning L.J. were that A and B made a
written agreement for the purchase and sale of "horsebeans," by
which both A and B meant "feveroles," which, again according to
Denning L.J., are something "essentially different." Denning L.J.
held that although both parties meant to deal with feveroles, they
were contractually bound to buy and sell horsebeans, because their
agreement as outwardly expressed, both orally and in writing, was
for "horsebeans." It is a platitude to say that the law of contract
exists to enforce agreements, and that agreements are what people
have agreed to do, not what officious people with no interest in the
matter would think they had agreed to do.5" It may be acceptable
for the law occasionally to force upon one of the parties an agreement
he did not want; but surely there is something wrong with a theory
which forces upon both of the parties an agreement which neither
of them wants. If the "fly on the wall" theory does this, that is an
excellent reason for rejecting it.

If we reject the "fly on the wall" theory of agreement, we are back

to the less extreme theory of apparent consent established in Smith
v. Hughes, according to which A's words are judged as B, the
addressee, understood them, and not as C, an eavesdropper, would
have understood them. Here it might be convenient to summarise
the Smith v. Hughes theory as follows:

55 Cf. Restatement-Contracts, s. 71 (c), illustration (2). "A says to B, 'I offer

to sell you my horse for $100.' B, knowing that A intends to offer to sell his
cow, not his horse for that price, and that the use of the word 'horse' is a
slip of the tongue, replies ' I accept.' There is no contract for the sale of either
the horse or the cow." Sed quaere. If neither party has misunderstood the
other, surely the answer ought to be that there is a contract for the sale of the
COW.
56 [1953] 2 Q.B. 450. The decisions of the other members of the Court of Appeal
seem to be based rather on the assumption that feveroles are simply a special
kind of horsebean, that there was no dispute as to what the parties agreed to
buy and sell, but simply a mistake of both parties as to the qualities of what
they agreed to buy and sell. So the case was one where the parties had reached
agreement, but under a common mistake which did not go to the root of the
transaction.
57 See Glanville Williams, 23 Can. Bar Rev. 380 at p. 387, and also 17 M.L.R. 154.
See also Slade, 70 L.Q.R. 385, 396, n. 50.
 The Cambridge Law Journal [1973]

(a) Where A leads B to believe that he agrees to B's terms, A

is bound by his apparent consent, although he did not in
fact agree to the terms as B understood them.
BUT
(b) A is not bound by his apparent consent where B knew that
A's mind did not go with his apparent consent,
(c) nor is A bound by his apparent consent where B originally
misled A, so that it is partly B's fault that A's mind did not
go with A's apparent consent.

Smith v. Hughes AND THE SIGNED DOCUMENT CASES

Let us now look afresh at the facts of L'Estrange v. Graucob,5"
taking that case as the archetype of those in which a person has
been held bound by a term in a contractual document of which he
was unaware.
Miss L'Estrange, the proprietor of a caf6 in Llandudno, was
visited by two of Graucob Ltd.'s salesmen, who persuaded her to
order a cigarette machine, to be sold to her by their company. They
produced an order form, which she signed without reading properly.
It contained a mass of clauses, including the following: "Any
express or implied condition, statement or warranty, statutory or
otherwise, not stated herein, is hereby excluded." She did not realise
this term existed until she later tried to sue the company for breach
of section 14 (1) of the Sale of Goods Act 1893 in selling her an
article which was unfit for the purpose for which it was sold, when
the company set this exemption clause up as a defence. Neverthe-
less, it was held that the exemption clause formed part of the contract
which she had made, that it exempted the company from liability
under the Sale of Goods Act, and that Miss L'Estrange accordingly
lost her action.
Was this right? When Miss L'Estrange signed the order form
on which were written various terms, she gave the appearance of
agreeing to everything that was written on the document. To
borrow the words from Smith v. Hughes itself,5" she so conducted
herself "that a reasonable man would believe that she was assenting
to the terms proposed by the other party." It would usually follow
from this that she was bound by her apparent consent to all those
terms. However, a person is not bound by apparent consent where
the other party knew that his mind did not go with his apparent
consent, or where the other party is responsible for the mistake which

58 [1934] 2 K.B. 394.

59 (1871) L.R. 6 Q.B. 597 at p. 607, per Blackburn J.
C.L.J. The Rule in L'Estrange v. Graucob

has been made. Didn't the facts of the case bring Miss L'Estrange
within the scope of these exceptions to apparent consent?
The order form which Graucob Ltd. provided seems to have
been drawn up in a most confusing way. Maugham L.J. said
"... I could wish that the contract had been in a simpler and more
usual form. It is unfortunate that the important clause excluding
conditions and warranties is in such small print." '0 Not only was
this clause printed in small print, but it was also printed on brown
paper, which must have made the small print even harder to read.
The general layout of the form also appears to have been confusing,
too, the exemption clause being in a part of the document where it
easily escaped notice. Then was this not one of those cases where
although A apparently consented to B's terms, he did so because B
had earlier confused him as to what those terms should be? In
principle, the case is surely the same as Scriven v. Hindley,6 ' where
A was allowed to deny his apparent consent to a contract to buy tow,
because the auction catalogue had been confusing, and had contri-
buted to form A's belief that he was offering to buy, not tow, but
hemp.
Perhaps Miss L'Estrange could have gone even further than this,
and also denied her apparent consent to the exemption clause on the
ground that the company either knew or ought to have known that
her mind did not go with her apparent consent. Why did Graucob
Ltd. use order forms printed on brown paper containing obscure
exemption clauses in minute print in unexpected places? Was it
because it knew that if it said what it meant more plainly, its
customers would understand the document they were being asked
to sign, and would refuse to do so? Who in their right mind would
sign a document headed "I agree to pay for your goods even if they
are useless, and not to sue you even if they injure me? " Even if
Graucob Ltd. had used the words it did use-" any express or
implied condition, statement or warranty, statutory or otherwise, not
stated herein is hereby excluded "-Miss L'Estrange might still have
refused to sign if those words had been printed clearly where they
could be seen. She would not have understood them, of course, but
like the plaintiff in Curtis v. Chemical Cleaning and Dyeing Co.
Ltd., 2 she might have asked the salesmen what the words meant.
If the salesmen had explained correctly, presumably she would not
have signed. If he had explained incorrectly, then the company
would have misrepresented the legal effect of the form, and, like the

60 [1934] 2 K.B. 394 at p. 407.

61 [1913] 3 K.B. 564.
62 [1951] 1 K.B. 805; Jaques v. Lloyd [1968] 1 W.L.R. 625.
 The Cambridge Law Journal [1973]

Chemical Cleaning and Dyeing Co., would have been unable to rely
on the exemption clause.
The truth is that whatever may have been Graucob Ltd.'s inten-
tions disreputable companies put harsh exemption clauses in minute
print in order to "put one over" people like Miss L'Estrange.
Then why should people in her position not be allowed to deny their
apparent consent to the clause because the company either knew or
ought to have known that their mind did not go with their apparent
consent? 63
Yet the Divisional Court, which felt sorry for Miss L'Estrange,
did not allow her to deny her assent to the exemption clause by
alleging either that Graucob Ltd. were to blame for her mistake,
as in Scriven v. Hindley, or that they had actual or constructive
knowledge of the mistake she had made, as in Hartog v. Colin and
Shields. Why not? "
A similar puzzle is set by Blay v. Pollard and Morris.65 Pollard
and Morris were partners in a garage. They decided to dissolve the
partnership, and Pollard's father, a solicitor, drew up a contractual
document to put their decision into legal effect. Morris signed this
document without understanding it properly, and without noticing
that a clause in the contract made him liable to indemnify Pollard
against claims for arrears of rent. Blay, the landlord of the garage,
sued Pollard for rent due, and Pollard in turn sought indemnity from
Morris. Morris denied liability. He said that he never intended to
agree to indemnify Pollard, and what is more, that Pollard knew this
when he, Morris, signed. This allegation, if proved, should have
enabled him to deny his apparent consent, as the defendant was
allowed to do in Hartog V. Colin and Shields, for example. The
trial judge found Morris's allegation proved, and gave judgment for
him, but the Court of Appeal reversed the decision, holding that the
argument was not open to him. He could plead fraud, or non est
factum, as defences, and nothing else.66 Why was this?
6.3 As the defendant was allowed to do in the analogous Canadian case, Colonial
Investment Co. of Winnipeg v. Borland (1911) 1 W.W.R. 17.1; (1912) 2 W.W.R.
960, and in the American case, International Transportation Assn. v. Atlantic
Canning Co. (1933) 249 N.W. 240, discussed post, pp. 121-2.
64 It could be that neither of these arguments were raised, of course. We know
that counsel tried unsuccessfully to prove a misrepresentation about the legal
nature of the document, but little else about how he put his case. Alternatively,
the court may have seen any such argument as amounting to a charge of fraud
against Graucob Ltd., which in the circumstances could not be raised. See
[19341 2 K.B. 394 at p. 403, per Scrutton L.J. See also n. 67, post.
65 [1930] 1 K.B. 628.
66 In this case, the court did not even mention the possibility of a defence of
innocent misrepresentation, which was later allowed in L'Estrange v. Graucob.
In Blay v. Pollard and Morris a claim for rectification of the document, based
on the allegation that it failed to give effect to the prior agreement of both
parties, was also made. This failed, because Morris could not prove the
document to have been signed under a common mistake.
C.L.J. The Rule in L'Estrange v. Graucob

The reason why the courts in both L'Estrange v. Graucob and

Blay v. Pollard and Morris refused to admit the usual defences based
on Smith v. Hughes, and restricted the range of available defences
to fraud, misrepresentation and non est factum, appears to be that
both courts thought that there was something special about a signed
document.6 Where there is a signed document, the courts thought
that some kind of magic operated to take the contract out of the
usual rules that govern the formation of contracts, and to bind the
signatory almost absolutely.
At any rate, this is certainly how later commentators have
explained the cases. Kerr on Fraud and Mistake says "But where
there is no fraud then unless non est factum is available the deed 68
will stand even between the parties," 65 and in McCutcheon v.
MacBrayne Lord Devlin said "Unless your Lordships are to dis-
approve the decision of the Court of Appeal [sic] in L'Estrange v.
Graucob-and there has been no suggestion in this case that you
should-the law is clear, without any recourse to the doctrine of
estoppel,"5 that a signature to a contract is conclusive." "7
Why did the courts think that signed contracts deserved special
treatment? Two ideas probably led them to apply special rules to
such a case, although neither of these ideas was precisely expressed
in either Blay v. Pollard and Morris or in L'Estrange v. Graucob.
Both ideas will be examined now, and, it is hoped, shown to be
misconceptions.

THE PAROL EVIDENCE RULE

In an earlier case 72 which was cited and relied on in L'Estrange v.
Graucob,7 Scrutton L.J. had this to say. "There is no doubt as to
the general rule that, when a contract has been reduced into writing, it
is not open to give oral evidence to show that a term in the written
document is not part of the contract. . . ." This suggests that in
67 A further reason why both parties failed is that Scrutton L.J. apparently saw a
defence based on Smith v. Hughes as amounting to an allegation of fraud,
which could be made in neither case, because it should have been (and had not
been) raised expressly in the pleadings; see [19301 1 K.B. 628 at pp. 633-634;
[19341 2 K.B. 394 at p. 403. Sed quaere. To say that the parties did not agree
is not the same as to say that one cheated the other. There is no suggestion
that a defence of no consensus amounts to fraud in Smith v. Hughes itself,
nor in the Court of Appeal decision in London Holeproof Hosiery v. Padmore
(1928) 44 T.L.R. 499.
68 It is clear from the context that the author is not talking about deeds alone, but
is referring to all kinds of signed instrument.
69 7th ed., p. 448.
70 Author's italics.
71 [1964] 1 W.L.R. 125 at p. 134.
72 Roe v. Naylor (No. 2) (1918) 87 L.J.K.B. 958 at p. 964.
73 [1934] 2 K.B. 394.
 The Cambridge Law Journal [1973]

reaching its decision in L'Estrange v. Graucob11 the Divisional

Court had the parol evidence rule at the back of its mind.
The parol evidence rule says that external evidence may not be
adduced to vary the terms of a written contract. As Salmond and
Williams put it, "the instrument is exclusive and conclusive evidence
of the contract." " The form in which the parol evidence rule
usually appears is this-" the document is the whole contract "-
and neither party may seek to set up terms which are not part of the
writing. Does the parol evidence rule have a second limb as well-
"the document is nothing but the contract "-which prevents one of
the parties alleging that a written term is not part of the contract,
whatever the position according to Smith v. Hughes " may be?
Some authority certainly suggests that this is so. Chitty wrote the
following:
'Where the terms of a promise admit of more senses than one,
the promise is to be performed in that sense in which the
promisor apprehended at the time that the promisee received
it...' " This rule appears to be as true in law as in ethics;
subject, perhaps, to this general principle of the law of evidence,
that parol testimony cannot be received to contradict the evident
sense of a written agreement, however manifest it may be,
independently of the written instrument, that the promisor meant
to make a different bargain.78
It is submitted that what Chitty said in 1834 is not the law today,
however. The parol evidence rule has been so whittled down over
the years that nowadays it is said to amount to no more than a
rebuttable presumption "that a document which looks like a contract
is to be treated as the whole contract." 71 Even this presumption is
not applied so strictly as it used to be.80 There is a host of excep-
tional cases where terms not appearing in a contractual document
may be proved by parol evidence. 8 And there are also various
cases in which the courts have allowed a man to produce parol
evidence to prove that he did not really agree to terms which did
form part of the document, the most remarkable of these cases being
74 The Court of Appeal in Blay v. Pollard and Morris [1930] 1 K.B. 628 and the
Court of Appeal in Roe v. Naylor (No. 2) had a common factor in the person
of Scrutton L.J. So the court in Blay v. Pollard and Morris probably had the
parol evidence rule in mind, too. It is also worth noticing that L'Estrange v.
Graucob was cited with approval in a leading parol evidence rule case, Hutton
V. Watling [1948] Ch. 398.
75 p. 147, relying on Goss v. Nugent (1833) 5 B. & Ad. 58; 110 E.R. 713.
76 (1871) L.R. 6 Q.B. 597.
77 Quoting Paley, Moral Philosophy.
78 Chitty's Law of Contracts (1834) (later Chitty on Contracts), p. 63.
79 Wedderburn [1959] C.L.J. 58, 62.
so Ibid. p. 63.
81 See authority collected in Treitel, 3rd ed., p. 152 et seq.
C.L.J. The Rule in L'Estrange v. Graucob

City and Westminster Property v. Mudd.8 2 Textbooks on contract

law generally say that notwithstanding the parol evidence rule, parol
evidence may be given to prove mistake. 83 So it seems unlikely
that the parol evidence rule enables B to hold A bound by a term of
a contract which A has signed not knowing it was there, if B either
caused or connived at A's mistake.

Non Est Factum

The second idea behind L'Estrange v. Graucob and Blay v. Pollard
and Morris appears to be a mental confusion arising from non est
factum. The courts knew that non est factum is a defence of mistake
which may only be pleaded in connection with signed documents.
From this they deduced that non est factum is the only defence of
mistake which may be pleaded in connection with a signed docu-
ment-a different proposition from the first, and one which does not
follow from it.
There is a preliminary objection to this argument. Why, if it is
right, may fraud and misrepresentation be raised as defences to a
claim brought on a signed contract? Fraud and misrepresentation
are both, after all, only special kinds of mistake. A mistake is a
state of mind not in accordance with the facts.8 5 Fraud, then, is
mistake which is deliberately induced by the other party, and innocent
misrepresentation is mistake which is innocently induced by him. If
82 [1959] Ch. 129. Cf. Couchman v. Hill [1947] K.B. 554; Curtis v. Chemical
Cleaning and Dyeing [1951] K.B. 805; and Jaques V. Lloyd [1968] 1 W.L.R. 625.
83 Salmond and Williams, p. 162; Treitel, 3rd ed., p. 152.
84 When the two cases under discussion were decided, the rules of non est factum
were substantially different from those obtaining today. In 1934, a defence
of non est factum was only available to someone who had signed a document
under a mistake about the class of document in question; a mistake about its
contents, however serious, would not do; Howatson v. Webb [1907] 1 Ch. 537;
[1908] 1 Ch. 1. Neither Miss L'Estrange nor Morris could have raised the
defence because each understood the class of document they had signed, and both
had made a mistake about its contents only. In 1971, the House of Lords gave
non est factum a face-lift. In Saunders v. Anglia Building Society [19711 A.C.
1004, the House of Lords virtually overruled Howatson v. Webb, holding that
in future, any really serious mistake about the document signed could give rise
to non est factum, whether it was a mistake as to class or as to contents.
However, neither Miss L'Estrange nor Morris would be in any better position
under the new version of non est factum than they were under the old. The
House of Lords stressed that the mistake must still be such as to make the
transaction radically different from what the signatory imagined, and to judge
from the examples their Lordships gave, the mistakes which Miss L'Estrange
and Morris made would be wholly insufficient to raise a defence of non est
factum even today. In fact, both persons would probably be worse off under
the new rule than they were under the old. Formerly, it was irrelevant that the
signatory had been careless in not reading the document-Carlisle & Cumberland
Banking Co. v. Bragg [1911] 1 K.B. 489. But the House of Lords overruled
Bragg's case and held that carelessness of this kind precludes the defence
altogether.
85 Restatement-Contracts,s. 500; Williston on Contracts,s. 1535.
. 120 The Cambridge Law Journal [1973]

in the case of a signed document, mistake may only be set up by a

plea of non est factum, logically fraud and misrepresentation should
not be allowed as defences any more than a plea of mistake based
on Smith v. Hughes. Yet L'Estrange v. Graucob and Blay v.
Pollard and Morris expressly allow such defences to be raised.
There is a second and historical objection to the idea that non
est factum excludes any defence based on failure to agree within
the rules set out in Smith v. Hughes." It is that such a rule ignores
the distinction between non est factum as applied to deeds and non
est factum as applied to simple contracts, and that it also ignores
the differences between situations involving two parties and those in
which there are three.
Non est factum evolved as a defence to an action on a deed before
the law of simple contracts had been developed. If A, a party to a
deed, was sued by B, the other party, A certainly could not allege a
mistake about the terms of the instrument unless it fulfilled the require-
ments of non est factum, and this is a rule which probably holds good
for deeds today. But that does not mean the same is true where A and
B are parties to a simple contract that has been reduced to writing.
Non est factum was first applied to a simple contract in Foster
v. Mackinnon in 1869. s8 Except for L'Estrange v. Graucob and
Blay v. Pollard and Morris, all the cases " in which non est factum
has been applied to simple contracts since 1869 have had this feature
89
in common: they were all three party situations. In each one, B
duped A into signing an instrument which, unknown to A, conferred
some presumed benefit on C, an innocent third party-the Cundy v.
Lindsay 90 situation, in other words, but involving instruments instead
of chattels. These cases say that A may not raise any defence
except non est factum against C, but there is nothing in any of them
to suggest that where we are dealing with a simple contract, as against
a deed, the only defence which A may raise against B is one of non
est factum.
Nowadays it is generally admitted to have been an error of policy
as well as of legal history to apply non est factum to simple contracts
86 See Landon, 51 L.Q.R. 272 at p. 274.
87 (1869) L.R. 4 C.P. 704.
88 Hunter v. Walters (1871) L.R. 7 Ch.App. 75: Lewis v. Clay (1897) 67 L.J.K.B.
224: National Provincial Bank v. Jackson (1886) 33 Ch.D. 1; Howatson V.
Webb [19071 1 Ch. 537; [1908] 1 Ch. 1; Bagot v. Chapman [19071 2 Ch. 222;
Carlisle & Cumberland Banking Co. v. Bragg [1911] 1 K.B. 489; Mercantile
Credit v. Hamblin [1965) 2 Q.B. 242; Muskham Finance v. Howard [1963] 1
Q.B. 904; Saunders v. Anglia Building Society [1971] A.C. 1004.
89 A further exception is the decision of the Privy Council in Hasham v. Zenab
[19601 A.C. 316, where despite counsel's submission that mistake and non est
factum overlap [19601 A.C. 316 at p. 329, the court appeared to think they did
not. However, the decision is not binding in England, being a decision on the
interpretation of the Indian Contracts Act in force in East Africa.
'0 (1876) 1 Q.B.D. 348; (1877) 2 Q.B.D. 96; (1878) 3 App.Cas. 459.
C.L.J. The Rule in L'Estrange v. Graucob

at all.9 ' Surely, then, the courts in L'Estrange v. Graucob 92 and

Blay v. Pollardand Morris 93 were wrong to extend non est factum
as applied to simple contracts to the two party situation at all-let
alone to say that in such a situation, it operates to exclude any other
kind of defence of mistake altogether.

CONCLUSION
It seems to have been a misunderstanding of two other rules, then,
which led the courts to lay down the rule in L'Estrange v. Graucob.
It is therefore submitted that they were wrong so to restrict the
defences open to someone who signs a contractual document under
a mistake as to the terms which it contains. Instead, they ought to
have allowed him the possibility of pleading that he did not mean
to consent to the disputed term, and that although he appeared to
consent to it, the other party either caused or connived at his mistake.
When L'Estrange v. Graucob and Blay v. Pollard and Morris
were decided, there was authority on which the courts could have
reached the result which is advocated here. Hitchman v. Avery 94
is an example. Hitchman, a dairyman, persuaded Avery, his rounds-
man, to sign a contractual document containing a covenant forbidding
him to set up a rival business if he left Hitchman's service. Hitchman
knew that Avery could not read, although he had learnt to write his
name in the army. Wright J. held that although Avery would
ordinarily have been estopped from denying his consent to the term,
no such estoppel arose, because Hitchman knew Avery could not
read. Thus Avery was not bound by the covenant, of which he was
unaware when he signed the paper.
It is instructive to compare a Canadian approach to the problem
of confusing documents which are signed but not fully understood.
In Colonial Investment Company of Winnipeg v. Borland,95 D went
91 Cheshire and Fifoot, 8th ed., p. 236; Saunders v. Anglia Building Society [1971]
A.C. 1004 at p. 1024, per Lord Wilberforce.
92 [19341 2 K.B. 394.
93 [1930] 1 K.B. 628.
94 (1892) 8 T.L.R. 698. This case must go some way to counterbalance The Luna
[1920] P. 22, another decision at first instance, which goes the other way. See
also Roe v. Naylor (No. 1) [1917] 1 K.B. 712, where at p. 716 Atkin J. said
" If a party signs the document he is taken to have assented to the terms con-
tained in it. If although he has not signed the document, he has received it
without dissent, he would also prima facie be taken to have assented to the
terms. But in both cases the issue might arise whether a particular clause was
one of the terms so assented to. In that case the question would be, was the
document in such a form that a reasonable man reading the document with
reasonable care might and did fail to see that the particular clause in question
formed part of the contractual terms? " See also Alan v. Mawson (1814) 4
Camp. 115; 171 E.R. 37, and the case referred to by Lord Hardwicke in 2 Atk.
32; 26 E.R. 416. None of this authority was cited in L'Estrange v. Graucob
or in Blay v. Pollardand Morris.
0.5(1911) 1 W.W.R. 171. Affirmed (1912) 2 W.W.R. 960.
 The Cambridge Law Journal [1973]

to the P company to obtain a loan. He was induced by P's employees

to sign a document which, unknown to him, imposed on him a
number of stringent obligations in addition to the duty to repay the
money with interest. When the P company tried to enforce the
contract, Beck J., in the Supreme Court of Alberta, refused to enter-
tain the claim based on the parts of the document of which D had
been unaware. The document, Beck J. held, was drawn up in a
confusing way, and this led D to sign it without understanding it
properly. In the circumstances, the company must be taken to have
known that someone in D's situation would make such a mistake.
Accordingly Beck J. applied the rules set out in Smith v. Hughes,96
and allowed D to deny his apparent consent to all the terms when
he signed the document." '
Policy considerations, but of different kinds, no doubt lay behind
both the Canadian and the English approaches to this problem. The
Canadian court was impressed by the abuses which would result-
and, in England, have resulted-from enabling companies to hold
ignorant signatories to the letter of sweeping exemption clauses con-
tained in contracts in standard form. The English courts, however,
were much more impressed with the danger of furnishing an easy
line of defence by which liars could evade contractual liabilities freely
assumed. 8 "It would be very dangerous to allow a man over the
age of legal infancy to escape from the legal effect of a document he
has, after reading it, signed, in the absence of any express misrepre-
sentation by the other party of that legal effect." 91 Forty years later,
most lawyers would admit that the English courts made a bad choice
between two evils. They tried to leap over the mud, only to land
in the mixen. Now it will take the best efforts of the House of Lords,
or, more probably, the Law Commission, to pull them out

96 (1871) L.R. 6 Q.B. 597.

07 Cf. an American decision, International Transportation Association v. Atlantic
Canning Co. (1933) 249 N.W. 240, and two further Canadian decisions, Inter-
national Transportation Association v. Winnipeg Storage Ltd. [1931] 2 W.W.R.
664 (Manitoba), and International Transportation Association v. Capital Storage
[19281 4 D.L.R. 480 (Saskatchewan). P sent D a document requesting informa-
tion about his business for a trade directory. Among a mass of clauses was
hidden one whereby D promised to pay P $100 for the privilege. On these
facts, D was allowed to deny his consent to a contract.
98 When the courts rule out a particular line of defence altogether lest liars abuse
it, the results are usually too harsh, because by so doing they prevent an honest
man from telling an unlikely tale on the rare occasion when it happens to be
true. Cf. the " objective " test of mens rea established in D.P.P. v. Smith [1961]
A.C. 290, reversed after public outcry by the Criminal Justice Act 1967, s. 8.
99 Blay v. Pollard and Morris [19301 1 K.B. 628 at p. 633, per Scrutton L.J.