Story Case

Mr. Johnson went into the office of the Western Union Telegraph Company for the purpose of sending the following message:

"J. L. Jenkins, Mobile, Alabama. Purchase all cotton possible at not over 10½c. J. W. Johnson".

The agent transmitted the message, but as delivered to Jenkins, it read: "Purchase all cotton possible at not over ll½c." The latter purchased six thousand bales at ll¼c, as cotton had risen rapidly in value within the previous twenty-four hours. When Johnson learned what had been done and realized that he was unable now to dispose of the cotton at a profit, he brought suit against the company for damages, showing that he was compelled to sell the cotton in question for 10¾.

The company made the following defense: The agent furnished Johnson with a blank which contained the word "over" at the bottom, and informed him that there were certain conditions on the back of the blank. But Johnson neglected to read them. One condition maintained: "That the company will not be liable for damages to any greater amount than the price of the telegram, in case of mistakes, unless the sender directs that the message be repeated".

Is that a term of their contract?

Ruling Court Case. Durgin Vs. American Express Company, Volume 66 New Hampshire Reports, Page 277

On the 20th day of January, 1888, an agent of the American Express Company received from Durgin a box weighing thirty-seven pounds; this box contained silverware, which amounted in value to $680. It was to be carried by the company to a person in New York City. Durgin had shipped goods with the American Express Company frequently before this time. He had in his possession blank receipts issued by the company for the convenience of its customers and patrons. On the back of this blank there were various stipulations one of which stated that the company would not be liable for the loss beyond the sum of $50, unless a different valuation was placed on the same by the shipper at the time of shipment. Durgin, knowing that the company based the rates upon the valuation of the property and that this stipulation was on the blank, filled it out, signed it and delivered it to the company with the goods in question. During the course of transit, the silverware was lost or stolen. The company was willing to pay only fifty dollars.

Thereupon, Durgin sued for the full value of the property lost.

The company contended that he could not recover more than $50, because the terms of their contract called only for that sum in case of loss. Durgin claimed that he was not bound by that stipulation because he never assented to it, although he knew it was on the blank receipt.

Decision

The Court was of the opinion that the stipulation in question, which was known to Durgin when he shipped his goods, became a part of the contract, even though he may not have expressly assented to it. He knew that the company charged for carriage upon the basis of the value of the property, and he knew that the rate would have been much higher had the company known the real value of the property; under these circumstances, it would be unjust to allow him to escape the effect of the stipulation.

Judgment was given for Durgin for the sum of only $50.

Ruling Law. Story Case Answer

Many companies, especially telegraph and express companies, furnish to patrons blank forms for contracts of service. These generally contain certain printed conditions either on the back or on the face. Persons frequently know that there are terms and conditions printed thereon, but neglect to read them. It becomes an important question to know just how far such conditions are binding upon people who deal with these companies.

In the first place, these terms must be such that they might become a part of the contract if the parties expressly agreed upon them. Assuming that they are of this nature, if the party knows of their existence and has read them, he will be bound by them, whether or not he expressly assented. Also, if he knows that there are terms and conditions, and does not read them, he is bound by them, because his indifference may be presumed to be his assent or agreement.

In the Story Case, Johnson's attention was directed to the fact that there were conditions, both by the blank form itself, as well as by the agent. Neglecting to examine them, he will be bound by them, even though he did not expressly agree to them.