Spinning the Wheel: the Application of the ‘Onerous Clause Doctrine’ 

This post was contributed by Professor James Devenney, Module Convenor for Commercial law.

If you sign a document which includes a particular clause (perhaps an exclusion/limitation clause), the clause is traditionally regarded part of the contract, regardless of whether or not you have read it (L’Estrange v F Graucob Ltd [1934] 2 KB 394). If the document is not signed, the clause usually must be brought to the attention of the other party before the contract is concluded. It is said that the other party must have ‘reasonable notice’ of the clause (although this does not necessarily mean that the other party has to actually read it): see further M. Furmston and J. Devenney, Sale and Supply of Goods (4th edition., Routledge, 2025) Chapter 10.   

In Interfoto Picture Library v Stiletto Visual Programmes [1988] 1 All ER 348 the Court of Appeal famously stated that the more onerous (or unusual) the clause, the more must be done to bring it to the attention of the other party.  The Court of Appeal consisted of Dillon LJ and Bingham LJ and, whilst Dillon and Bingham LJJ agreed on the outcome, their approaches were slightly different.  Dillon LJ held that the relevant term had not been incorporated whereas Bingham LJ held that the defendant was relieved of liability in the circumstances.   

Interfoto was more recently considered in MS Amlin Marine NV v King Trader Ltd [2025] EWCA Civ 1387 (involving a so-called ‘pay-first’ clause in a marine insurance policy).  This case is helpful in a number of ways: 

• It confirmed the application of Interfoto in the commercial context (Interfoto was itself a commercial case) although it also emphasised the high threshold to finding a clause to be onerous or unusual (see [88]). 

• It preferred the approach of Dillon LJ in Interfoto (see [85]). 

• It emphasised that the ‘onerous’ or ‘unusual’ clause doctrine does not apply where the other party actually knows of the existence of the relevant clause. 

• It preferred not to refer to the doctrine as the ‘red hand doctrine’, instead preferring the ‘onerous clause doctrine’ (see [83]).  

However, the application of the ‘onerous clause doctrine’ can still be difficult to predict, as is demonstrated by the contrast between two recent cases.  The first case is Parker-Grennan v Camelot UK Lotteries Ltd [2024] EWCA Civ 185 which concerned an online game where players had to match their numbers to the winning numbers (the “£20 Million Cash Spectacular”). When the claimant had opened her online account with the defendant she had to electronically tick a box to confirm that she agreed to be bound by the defendant’s terms. These terms were available on the defendant’s website through various hyperlinks etc.  When the claimant played the “£20 Million Cash Spectacular” one of the screens appeared (as a result of a coding error) to suggest that she had won £1 million (although the final screen indicated that she had only won £10). When the claimant sought payment of £1 million the defendant relied on their terms which provided that the prize to which players were entitled was predetermined by the system (and in the claimant’s case this was only £10).  Therefore, an issue arose about whether or not the defendant’s terms were incorporated.   

The Court of Appeal held that hyperlinked terms and conditions could be incorporated by a person electronically ticking a box to confirm that they agreed to be bound by them (see [46]). However, the claimant argued that this was not the case here for two main reasons.  First, the claimant argued that the relevant terms were onerous or unusual, with the result that the defendant was required to take further steps to draw them to the attention of the claimant (which it had not done).  The Court of Appeal disagreed that these terms were onerous or unusual:  

“These clauses are explanatory in nature; they merely set out what is required in order to achieve the entitlement to be paid the prize money. They do not impose any burden on the player, nor do they deprive them of a prize to which they would otherwise be entitled. They are rules which ensure that money is only paid out for valid prize wins. There is nothing onerous, let alone unfair, about that.” ([35]) 

The second argument advanced by the claimant against incorporation was that there was nothing to force potential players to read the defendant’s terms before electronically ticking the relevant box. The Court of Appeal rejected this argument on the ground that “…the question is not whether the trader has done everything in its power to try to make the other contracting party read the terms” ([46]). The relevant test was whether the defendant had taken reasonable steps and this was satisfied on the facts. 

Parker-Grennan v Camelot UK Lotteries Ltd was distinguished in Durber v PPB Entertainment Ltd [2025] EWHC 498 (KB). This case also involved online gambling. As the result of a computer error the claimant thought she had won £1,097,132. However, this was contested by the defendants who relied, inter alia, on their Terms of Use which stated “…we will not be liable to you as a result of any such errors and we reserve the right to void all related bets and plays on the game in question.”  The learned judge held this to be an onerous and unusual term which had not been adequately brought to the claimant’s attention.  Ritchie J. thought this clause was different to the relevant clauses in Parker-Grennan v Camelot UK Lotteries Ltd in that it acted as an exclusion of liability rather than a ‘how you win this game’ clause (see [107]). 

So, although recent case law has brought some welcome clarity to the onerous clause doctrine, its application can still sometimes be difficult to predict.  Indeed, there is much merit in the suggestion of Andrews LJ (Parker-Grennan v Camelot UK Lotteries Ltd [2024] EWCA Civ 185 at [68]) that it may be time for the Law Commission to review this broad area.