Excluding liability in T&Cs - a very expensive lesson for Betfred!
James Phinn and Ellie-Jayne Cross, 22nd June, 2021
A recent High Court case serves as a reminder for all companies to have in place clear terms and conditions (T&Cs), and ensure unusual or onerous terms are properly brought to the customer’s notice – this is of upmost importance especially in relation to contracts made with consumers.
Back in 2018, Mr Green played a game called ‘Frankie Dettori’s Magic Seven Blackjack’ on an online app hosted by Betfred. After a number of hours when Mr Green had stopped playing, the app showed that he had won £1,722,500.24 but despite this, Mr Green was unable to withdraw his winnings. Betfred refused to pay out Mr Green’s winnings, based on its claim that there had been a software error in the game which was unbeknown to either party at the time.
Betfred relied on its own T&Cs, specifically clauses that excluded their liability for software malfunction/defect, and argued that in Mr Green’s case it was not therefore obliged to pay out. In light of this, Mr Green sued Betfred. The meaning and validity of Betfred’s T&Cs was central to this dispute, in particular the various exclusion clauses.
Based on the court’s interpretation of the exclusion clauses, there was nothing in Betfred’s T&Cs that adequately brought to Mr Green’s attention to a term that allowed Betfred to take away his winnings in circumstances which neither party had or could have had any idea that the something was amiss. The exclusion clauses which Betfred heavily sought to rely on were unclear, and accordingly could not be relied upon.
Betfred was unable to rely on its terms and conditions because it was unclear what they meant. Accordingly, when contracting with consumers it is crucial for supplier T&Cs to be clear and easily understood. Under the Consumer Rights Act 2015, contract terms must be fair and transparent. Any unclear, ambiguous and unfair terms are unlikely to be legally binding.
Consumers must be able to easily identify the terms and conditions, specifically consumers must understand what terms they are agreeing to and also where to find such terms. Extra care should be taken in respect of more onerous terms, and these should be prominent and be clearly brought to the consumer’s attention. If these terms are not obvious and a consumer has to scroll through pages in order to read through terms significant to them, they may simply not form part of the contract (as consumers probably won’t actually do this).
An effective way of drawing attention to specific terms can be through signposting, this could be achieved by setting out a list of important terms outside the T&Cs, and highlighting these to the consumer when they first sign up. However, simply highlighting terms in bold text within the T&Cs may not meet this requirement. Terms which aren’t clearly brought to a consumer’s attention and which aren’t obvious to the consumer may not form part of the contract, and where this is the case they can’t then be relied on to protect the supplier if the relevant circumstances later arise.
In order to avoid the court’s deciding the meaning of certain terms, key terms should always be defined.