Rethinking the signature rule and the sufficiency of signatures as evidence of notice of terms in (business-to-business) commercial contracts

Main Article Content

Moshood Abdussalam

Keywords

The rule in L’Estrange v Graucob/the signature rule, notice externalities, notice of contract terms, onerous terms

Abstract

Using socio-economic analysis, this article critiques the oversimplification at the heart of the signature rule, which governs sufficiency in the notice of terms to a contractual counterparty concerning signed contracts in Commonwealth common law jurisdictions. As demonstrated in this article, two main factors account for the inadequacy of the signature rule as currently conceived. The first is the assumption that commercial entities are sophisticated. Second, in contested cases concerning notice, only manifest onerousness or unusualness of terms should warrant a heightened duty of notification on an offeror. This article argues that the signature rule lacks nuance and should be reformed to account for context-specificity. This is because: a) commercial sophistication is a matter of gradation; and b) terms need not be unusual or onerous to require heightened disclosure requirements – what matters for specific disclosure is the salience or peculiarity of a term.
 
Abstract 138 | NILQ 74.3.2 Abdussalam Downloads 117