I
- Introduction
This advisory seeks to examine whether the mere inclusion of “Terms & Conditions” or a reference such as “Terms & Conditions website.com” on a receipt is legally sufficient to bind the parties to the provisions therein, or whether the complete text of the terms must be incorporated within the document. Terms & Conditions may be defined as special or general arrangements, rules, requirements, standards etc, forming integral parts of a contract or agreement between a provider of a service and the consumer.
To address these concerns, reference is made to the law and judicial precedent. - Legal Framework
2.1. The Constitution of Kenya 2010
The constitution in Article 35 provides for the right to access of information especially that which is held by another person that would be required for the protection of any right, including consumer rights provided in Article 46, which include right to the information necessary for them to gain full benefit from goods and services.
2.2. Consumer Protection Act
The act in Section 7 provides that any ambiguity of any information that must be disclosed to a consumer shall be interpreted to the benefit of the consumer. In case of a copy of internet agreement, the copy of agreement ought to include the required information in accordance with Section 32 of the Act. Further, Section 87 provides that the information shared should be clear, comprehensible and in a form which can be understood by the consumer. - Judicial Precedent
3.1. In the case of Parker v South Eastern Railway Co, Parker (the claimant) paid to deposit their belongings in a railway cloak room. When he deposited his belongings, the room’s operator gave him a ticket. The back of this ticket stated that the defendant (who operated the room) was not liable for any item worth more than £10. The same term was posted on a notice visible inside the cloakroom. The claimant did not read either the ticket or the notice. His belongings were stolen. When he sued the defendant for their value, the defendant sought to rely on the limitation clause on the ticket and notice. The case established the following;
i. That a person is not normally bound by terms on a document which a reasonable person would not assume contains contract terms, in this case, the ticket.
ii. That where it is obvious that a document contains contractual terms, the issuer must take reasonable steps to give the other party notice of that fact.
iii. That if reasonable notice is given, it does not matter that the recipient has not read the document.
3.2. The case of Olley v Marlborough Court Ltd speaks of incorporation of notice in a way that such notice forms part of the contract. Olley (the claimant) contracted with Marlborough Court Ltd (the defendant) to stay in a hotel room. Inside the room was a notice stating the defendant ‘will not hold themselves responsible for articles lost or stolen, unless handed to the manageress for safe custody. Valuables should be deposited for safe custody in a sealed package and a receipt obtained.’ The claimant’s possessions were stolen and when the claimant sued the defendant for loss of their possessions, the defendant tried to rely on the exclusion notice. The court held that the notice was not capable of forming part of the contract because the contract was created at the front desk when the claimant bought the room. The claimant only saw the notice afterwards, which was too late.
3.3. Lastly, in the case of Thornton v Shoe Lane Parking, the Thornton (claimant) parked his car in Shoe Lane Parking (the defendant’s) automated car park for a fee. A notice outside stated the charges and excluded liability for damage to cars. It did not mention anything about personal injury. A pillar near the ticket barrier, further into the premises, displayed eight lengthy conditions. The second condition stated that the defendant was not liable for any injury sustained on the premises. An automated machine near the barrier produced a ticket when the claimant entered. The ticket stated, in small lettering on the bottom, that it was ‘issued subject to conditions displayed on the premises.’ The claimant did not see or read any of these notices. The claimant suffered injury on the premises and sued. The court observed that in automated machine cases, the offer is made when the machines’ owner presents the machine as able to accept money. The customer accepts when they put money in the machine. This means that any terms placed on a ticket issued by the machine cannot be contractually binding, because the customer has had no opportunity to refuse them. By the time they see the ticket, there is no way of returning it.
- Analysis.
4.1. Adequacy of Notice: For a receipt that carries a reference to “Terms & Conditions” or a website where they are hosted, the critical issue is whether the consumer was given reasonable notice and the ability to review these terms prior to or at the time of concluding the transaction.
4.2. Incorporation by Reference: This is acceptable if it is clear that the terms were intended to form part of the contract and that the consumer had access to them. However, if the receipt merely contains a terse reference (e.g., “Terms & Conditions website.com”) without further guidance or assurance that the consumer was aware of and had an opportunity to review the terms, this may be deemed insufficient.
4.3. Risk of Ambiguity: Ambiguities arising from a minimalistic reference to the Terms & Conditions can lead to disputes regarding whether the consumer was properly informed of the contractual terms. - Conclusion and Recommendations
5.1. Merely including “Terms & Conditions” or “Terms & Conditions website.com” on a receipt may not automatically satisfy legal requirements unless it can be demonstrated that the consumer had effective notice and access to the full terms before or at the time of the transaction. If the consumer is meeting the Terms and Conditions at the receipt level which comes after offer, acceptance and consideration, then this will be construed as insufficient notice to the consumer.
5.2. Where possible, ensure that full Terms & Conditions are available and prominently disclosed during the transaction process.
5.3. Ensure that any precontractual or contractual document referencing to Terms & Conditions, incorporates clear instructions for the access or a QR code that leads directly to the full text, and provide an intermediate step for the consumers’ confirmation of their access the Terms& Conditions prior to their acceptance and payment of consideration. This will be proof that the consumer was given an opportunity to review these terms.