The High Court has held that the published online terms of Spreadex, a spread betting bookmaker, did not constitute a contract between it and its customer Mr Cochrane. The published terms included a term purportedly providing that Mr Cochrance would be deemed to have authorised all trading under his account number. When Mr Cochrane found that his account had been used by his girlfriend’s five year old son and that a loss of £50,000 had been run up, he contacted Spreadex to explain what had happened. Spreadex sought to enforce recovery of the £50,000 based on its online published terms, including the deeming provision mentioned above.
The High Court held that Spreadex had given no consideration to Mr Cochrane in relation to these terms – in order for a binding contract to form each party to the contract has to provide some benefit (consideration) to the other party. Instead the High Court found that Spreadex’s online terms did not commit Spreadex to provide any benefit to Mr Cochrane at all. Accordingly it found that each bet made by Mr Cochrane with Spreadex was an individual trade made on its own terms and not made on Spreadex’s online published terms. It followed that Mr Cochrane was not subject to the deeming provision and was therefore not liable for the trades made by his girlfriend’s 5 year old son.
The High Court held that had that not been the case, the deeming provision would not have been enforceable against Mr Cochrane in any event on the basis that it was unfair under the provisions of the Unfair Terms in Consumer Contracts Regulations 1999. Finally, the High Court noted that Spreadex’s online published terms included 49 pages of text and that it would have it been a miracle if Mr Cochrane had read the terms.
The case is of particular importance to businesses operating online. Such businesses should ensure that onerous terms are brought to the attention of consumers, comply with regulations regarding fairness and form part of the contract between the business and the consumer.