Spreadex Ltd v Cochrane

Spreadex Ltd v Cochrane

Clause 10(3) of the Customer Agreement is not binding as part of a pre-existing contract because the claimant failed to establish consideration or mutual obligations sufficient to create such a contract. Even if it were binding, Clause 10(3) is unfair under the UTCCR as it creates a significant imbalance in rights and obligations and is not incorporated in good faith. Clause 13(5) does not apply to online trades and, even if it did, would not alter the outcome. The claimant cannot recover unless it proves the trades were effected by the defendant or someone with his actual or ostensible authority.

Parties
Claimant: Spreadex Limited; Defendant: Colin Cochrane
Jurisdiction
England and Wales
Judgment Date
18 May 2012
Procedural Posture
Civil (commercial) / Summary Judgment Application
Outcome
Summary judgment refused; declaration granted
Legal Topics
Unfair Terms in Consumer Contracts, Online Contracts, Summary Judgment
Contract Law Consumer Protection Unfair Terms in Consumer Contracts Online Contracts Summary Judgment

Case Brief

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Parties

Spreadex Limited

Claimant

Colin Cochrane

Defendant

Procedural Posture

Civil (commercial) / Summary Judgment Application

Legal Issues

  1. 1 Whether Clause 10(3) of the Customer Agreement is binding and enforceable against the defendant for unauthorised trades
  2. 2 Whether Clause 10(3) is an unfair term under the Unfair Terms in Consumer Contracts Regulations, 1999 (UTCCR)
  3. 3 Whether Clause 13(5) provides an alternative contractual basis for liability for unauthorised trades

Ratio Decidendi

Clause 10(3) of the Customer Agreement is not binding as part of a pre-existing contract because the claimant failed to establish consideration or mutual obligations sufficient to create such a contract. Even if it were binding, Clause 10(3) is unfair under the UTCCR as it creates a significant imbalance in rights and obligations and is not incorporated in good faith. Clause 13(5) does not apply to online trades and, even if it did, would not alter the outcome. The claimant cannot recover unless it proves the trades were effected by the defendant or someone with his actual or ostensible authority.

Court Disposition

Summary judgment refused; declaration granted

Orders

  • Summary judgment application by claimant refused
  • Declaration that claimant cannot recover save in respect of trades effected by the defendant or with his actual or ostensible authority