Odile, a sole trader, is about to sign a printed equipment-hire agreement. She asks the supplier's sales representative what the small print covers, and he tells her it only limits liability for late delivery. In fact a clause also excludes all liability for defects in the equipment. She signs without reading the agreement, and the equipment proves defective. Can the supplier rely on the defects exclusion?

Correct answer: A) No, because the representative misrepresented the effect of the clause, so the supplier can rely on it only to the extent he described

Explanation

The general rule in L'Estrange v Graucob is that a person who signs a contractual document is bound by its terms whether or not they have read them. That rule does not apply where the other party has misrepresented the effect of the term. In Curtis v Chemical Cleaning and Dyeing Co, an innocent misrepresentation about the scope of a clause meant the defendant could rely on it only to the extent represented. Odile was told the clause covered only late delivery, so the supplier cannot rely on the defects exclusion. There is no requirement for separate initialling, and her business status does not affect the misrepresentation point.