(COURT OF APPEAL)

TAHA MOHAMED EL ROFAI v. PROVIDENT ASSOCIATION OF EGYPT

AC-RE V-199-1968

Principles

Contract—Standard form contract—Reasonable notice is essential—No question of signature arises

Standard form contract may be imposed on a person who is ignorant of its contents if there is a reasonable notice given by the party; but no question of signature can arise.

Advocate: Mustafa Abdel Kadir for the applicant

Judgment

Ramadan Ali Mohamed J. March 29, 1970 : —The respondent is the Saving Company of Egypt, a company limited by shares, with its registered head office in Alexandria, U.A.R. Its main object is to encourage and help people to save money and for this purpose it laid down a detailed scheme whereby debentures were issued under certain conditions. The relevant conditions which concern us for the disposal of the present application are as follows:

1. In consideration of an admission fee payable on subscription and the regular payment of the monthly installments, the debenture holder would have the right to join the monthly lottery conducted by the respondent company.

2. If the debenture holder was consistently unlucky for the period of 20 years, then he would be entitled to £S.400.000m/ms.

3. A debenture holder who regularly paid his installments for 2 years is entitled to restitution of only £S.12.440m/ms.

The applicants (plaintiffs in the suit) are husband and wife who sub scribed to three debentures and had paid the monthly installments for two years in respect of their debentures. Being unlucky all through they sought to recover their actual payments to the company alleging that the contracts to take debentures were induced by the misrepresentation of the respondent’s agent that the actual installments paid could be recovered. The learned District Judge, though he found as a fact that no misrepresentation was proved, held that the contract to take debentures was such a contract where full disclosure of all material facts was necessary and that as the applicants were illiterate and did not sign those contracts they could rescind the contracts and recover their actual payments. A judgment was then entered for the applicants (plaintiffs) accordingly.

On application to revise the above decree His Honor the Province Judge set aside the decree on the ground that the contract the subject of the suit is a standard form contract and that no question of signature or notice arises. It is against that decision that the present application is now made.

In order to make a contract voidable for mistake arising out of misrepresentation the representee must establish that the representor made a misrepresentation of fact which induced him to enter into the contract. It was found by the trial court that no misrepresentation of fact was proved and I have no reason to disturb this fact finding, I do agree with His Honour the Province Judge that the subject of this suit is a standard form contract and that no question of signature arises. Respondents were handed over the debentures with all the relevant conditions inserted on it and they carried out their obligations under it by regular payment of the installments. Illiteracy cannot avail the applicants. As regards notice I differ from the opinion expressed by His Honour the Province Judge that it does not arise. I do believe that it does.

A standard form contract may be imposed on another who is subjectively ignorant of its contents if the party imposing the contract has given notice which is reasonably sufficient in the circumstances. The leading case is Parker v. South Eastern Railway Co. (1877) 2 C.P.D. 416. In that case the plaintiff deposited a bag in the cloakroom of a railway station belonging to defendants. He received a paper ticket which said on its face “see back” and on the back were a number of printed conditions, including a clause limiting liability for any package to £10. The bag was lost, and the plaintiff claimed £24 10s. its value. It was held that, even though he had not read the exemption clause, he was bound by it, as the defendants had done what was reasonably sufficient to give him notice of its existence.

“The test is highly objective, and the fact that the particular plaintiff is under some non-legal disability, for example, that he cannot speak English, or is blind, or illiterate, is quite immaterial, provided that the notice is reasonably sufficient for the class of persons to which he belongs.” Anson, Law of Contract (21st ed., 1959), p.

In our case the conditions were set out at the back of the debenture with a reference to it on its face. So the applicants cannot rely on illiteracy as negativing due notice.The respondent did admit liability as regards £S.12.440m/ms. for each debenture (£s.37.320m/ms for the three debentures) and I wonder why His Honour the Province Judge set aside the decree of the District Judge without substituting one of his own to cover the admitted part of the claim. It is my decision, therefore, that both decrees of the lower courts be set aside, and a decree be entered in favor of applicants for £S. together with costs on this sum.

Dafalla El Radi Siddig J. June 4, 1970 : —Applicant raised two pleas namely that he did not sign the contract and did not even read it and that His Honour the Province Judge deprived him of 40 per cent, of the sum of £S.io8 which even respondent admitted. I concur to the view of Ramadan J. The fact that applicant did not read the contract he did on his own peril. Even if he is illiterate that is a misfortune and not a privilege. That he did not sign the standard form of respondent is counteracted by the issuing of notice on the part of respondents. See Cheshire and Fifoot, The Law of Contract (6th ed., 1964), p. 109. Having read the standard form it indicates twice on its face that there are conditions on its back.

I agree that His Honour the Province Judge unjustifiably deprived applicant of refunding the sum he is entitled to in the schedule at the back of the standard form.