Online bookie can't scoop £50k losses made by 5-year-old

High Court rules the website contract terms were unfair


A man who blamed his girlfriend's five-year-old son for making loss-making trades in expensive natural resources through his online betting account is not bound by a term he agreed to on the bookmaker's website, the High Court has ruled. The term stated that an accountholder is deemed to have authorised all trading made under his or her account number.

Colin Cochrane claimed to have left his computer at his girlfriend's house and that her son had used his Spreadex account to make trades in oil, gold and silver without his permission. Spreadex argued that Cochrane should have to pay the £50,000 losses that had been run up on his account, according to a report by the Metro newspaper.

Spreadex based its claim on a clause in its contract which meant Cochrane would be "deemed to have authorised all trading under [his] account number," a report by legal information service Lawtel said.

However, in rejecting Spreadex's bid for a summary judgment, the High Court said that the clause was not legally binding because it didn't form part of a binding contract and was "unfair". Spreadex was not able to show that Cochrane entered into a separate contract for each trade made via his account and as such the company's general contract applied.

The High Court said the company's contract had not been drafted in accordance with the 'good faith' requirement and caused a significant imbalance that negatively impinged on Cochrane's rights. Because the contract had not been individually negotiated with Cochrane the terms were not legally binding, it said.

The Unfair Terms in Consumer Contracts Regulations (UTCCR) set out rules to which businesses must adhere when drawing up contracts for customers. Under the regulations, "unfair" contract terms are prohibited and refer to terms in a contract which have not been "individually negotiated" that cause "a significant imbalance in the parties' rights and obligations arising under the contract, to the detriment of the consumer," contrary to the requirement that they be drafted in "good faith". Under the Regulations written contracts must also be drafted in "plain, intelligible language".

The Spreadex contract was unfair because the terms of the contract put no obligations on Spreadex but made Cochrane liable, without limitation, for unauthorised trade made via his account, the High Court ruled. The court also said that Spreadex had not made sufficient effort to inform Cochrane about the clause.

Spreadex could only force Cochrane to pay for the losses if it could show Cochrane had been responsible for the individual trades or had authorised someone else to make them, the High Court said.

"This is an odd case," gambling law expert Susan Biddle of Pinsent Masons, the law firm behind Out-Law.com, said.

"It is hard to see how companies can incorporate general terms into future contracts with consumers – unless this case can be distinguished on the basis that the problem here arose because of the total exclusion of Spreadex’s liability in contrast to the consumer’s unlimited liability. If Spreadex had accepted some liability and/or capped the consumer’s liability the contract may have been deemed binding," she said.

"I would not advise businesses to purse summary judgment applications where contract terms are disputed as unfair and the reasonableness of them is at issue, especially when it involves a consumer," Biddle added.

Copyright © 2012, Out-Law.com

Out-Law.com is part of international law firm Pinsent Masons.


Other stories you might like

  • Your snoozing iOS 15 iPhone may actually be sleeping with one antenna open
    No, you're not really gonna be hacked. But you may be surprised

    Some research into the potentially exploitable low-power state of iPhones has sparked headlines this week.

    While pretty much no one is going to utilize the study's findings to attack Apple users in any meaningful way, and only the most high-profile targets may find themselves troubled by all this, it at least provides some insight into what exactly your iOS handheld is up to when it's seemingly off or asleep. Or none of this is news to you. We'll see.

    According to the research, an Apple iPhone that goes asleep into low-power mode or is turned off isn't necessarily protected against surveillance. That's because some parts of it are still operating at low power.

    Continue reading
  • China will produce one in five of the chips it uses in 2026, says analyst
    Well short of planned 70 percent domestic capacity

    China’s integrated circuit (IC) production has failed to keep pace with its appetite for silicon, with market research firm IC Insights predcicting the nation will produce only one in five ICs it uses in 2026.

    That figure is a increase from 2021's one in six, and reflects eight percent compound annual growth rate from 2021 to 2026. But it means China will miss its own targets for locally-made-and-consumed silicon.

    “Although China has been the largest consuming country for ICs since 2005, it does not necessarily mean that large increases in IC production within China would immediately follow, or ever follow” said the firm in a bulletin on Wednesday.

    Continue reading
  • Tencent happily parting ways with loss-making cloud customers
    Cutting costs across sprawling business as COVID makes life hard in China

    Chinese tech giant Tencent has recorded its first ever quarter-to-quarter revenue fall, warned that COVID-19 lockdowns will hurt messing with its business, and cautioned against assumptions that Beijing is ready to enthusiastically support tech companies.

    On its Q1 2022 earnings call yesterday, the company offered more explanation of its shifting cloud strategy.

    Chief strategy officer James Mitchell told investors the company is pleased to have shown loss-making cloud customers the door, and “proactively scaled back … deeply discounted infrastructure-only contracts for basic services such as cloud compute and content delivery network.” Projects that had high costs and/or relied on sub-contractors have also been scaled back.

    Continue reading

Biting the hand that feeds IT © 1998–2022