McCutcheon v. David MacBrayne LTD.

Brief Fact Summary.

McCutcheon appealed a judgment of the court of appeals that required McCutcheon to bear the risk of loss as required by a risk note that was not provided by David MacBrayne LTD.

Synopsis of Rule of Law.

One party’s uncommunicated conditions cannot become part of the contract.

Facts.

McCutcheon asked his brother in law to ship his car through David MacBrayne, LTD. (MacBrayne). On this occasion, MacBrayne did not require McCutcheon’s brother in law to sign a risk note, that placed the risk of loss on the owner. The vessel transporting McCutcheon’s car hit a rock and sank, McCutcheon’s vehicle was destroyed. MacBrayne argued that they were not liable because the terms of the risk note applied. The trial court granted judgment to McCutcheon and the court of appeals reversed

Issue.

Whether one party’s uncommunicated conditions can become part of the contract?

Held.

No. The judgment of the appellate court is reversed and the terms of the risk not should not be applied. Neither McCutcheon or his brother-in-law were aware of the conditions contained in the risk note, nor was McCutcheon’s brother always required to sign a risk note in every transaction with MacBrayne. Although McCutcheon was consistently required to sign a risk note, McCutcheon signed such notes for different kinds of goods.

Concurrence.

(Hodson) You cannot bound a party to be bound to the terms of a document just because the party would have signed the document if presented with it.

(Devlin) The conditions of the risk note cannot be applied based on previous dealings with McCutcheon because McCutcheon was not aware of the conditions of the risk note. Similarly, the risk note was not issued in the immediate case.

Discussion.

If the parties continuously enter into contracts with specific terms, one parties uncommunicated terms can become part of the contract.