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McSporran, the appellant's brother-in-law and acting as his agent, arranged to ship McCutcheon's car to the mainland from the island of Islay. Usually, David MacBrayne Ltd. would have had its customers sign a risk note indemnifying MacBrayne but the purser with whom the arrangements were made did not ask McSporran to do so. The Lochiel, the ship carrying the car, sank due to negligent navigation on the part of MacBrayne. McCutcheon had signed a risk note on four occasions and McSporran had done so sometimes before too, but not every time arrangements were made. Both said they knew the notes contained conditions but not what the conditions were. David MacBrayne Ltd. argued that even though it was not signed, the term letting McCutcheon assume the risk of an accident had been incorporated into their contract through a course of dealing.


  1. Is a plaintiff bound by an unsigned contract considering that he had past dealings with the defendant?


Appeal allowed.


Reid begins with assessing the relevant principles; the contract was purely oral and any terms on the receipt came after the formation and thus cannot be regarded as terms. As a result there is no doubt the respondents are liable for the damage.

Devlin begins with assessing the evidence; essentially nobody reads the contracts with MacBrayne as they have no choice but to use them to ship things to and from Islay. While there was no argument made that McSporran had read the terms on this contract, MacBrayne argued that the the history of dealings indicated an acceptance of the terms. Devlin rejects this saying that previous dealings are only relevant if they demonstrate subjective knowledge of conditions, not simply demonstrating that there were previous dealings. As they were unable to demonstrate that there had ever been a subjective acceptance of the risk note, MacBrayne remains liable for the damages done.


  • A party is bound to a contract if signed.
  • Knowledge of terms is tested subjectively, thus prior relations are therefore not enough unless there was actual subjective knowledge of the condition.