Imagine thinking you had just become a millionaire – only for your expected prize to be taken away due to a coding error.

That stark reality was faced by Joan Parker-Grennan some nine years ago, when she played an instant win game on the National Lottery website. The animations on the screen suggested she had won a GBP1m prize. However, the predetermined outcome of the game was rather less life-changing: a GBP10 prize. The misleading animations had been the result of a coding error, and Camelot credited Parker-Grennan’s account with GBP10.

The terms of the game were accessible through hyperlinks and drop-down menus. One term stated that the outcome of each game was “predetermined” at the point the player pressed play. Another term allowed the National Lottery to invalidate a game if the prize claimed did not match their records (which, in this case, showed the prize to be GBP10). Before starting the game, all players had to accept these terms by clicking a tick-box and pressing “confirm” .

Parker-Grennan, however, issued a claim for GBP1m, and sought summary judgment. She argued that the terms on which Camelot relied were not incorporated into the contract and/or were unfair under the Unfair Terms in Consumer Contracts Regulations 1999. The judge at first instance dismissed her application, and she appealed to the Court of Appeal.

The parties’ arguments were considered again by the Court of Appeal, which had to determine (a) whether Camelot’s terms were incorporated into the contract between the parties, (b) whether any of those terms was unfair and thus unenforceable, and (c) as a matter of construction, whether the appellant had won GBP1m or GBP10.

The Court of Appeal gave unanimous judgment in favour of Camelot, finding as follows:

• Incorporation: When considering whether the terms were incorporated into the contract, the relevant question was whether Camelot had done what was reasonably sufficient to draw those terms to the appellant's attention – not whether they had done everything in their power to ensure the terms had been read. On the facts, the court found that the hyperlinks and drop-down menus were reasonably sufficient signposting, and the terms were therefore incorporated.
• Fairness: Did any of the terms cause a significant imbalance in the parties’ rights and obligations under the contract, to the detriment of the consumer? The court found that they did not – Camelot’s standard terms were not onerous or unusual, and therefore were both fair and enforceable.
• Construction: On the true construction of the contract, Parker-Grennan did not win GBP1m – the Camelot database had predetermined a GBP10 prize, and the misleading animations on the screen were not sufficient to override the terms.

The leading authorities concerning the incorporation of standard terms into a contract pre-date the digital era. While the Court of Appeal declined an invitation to lay down principles of more general application, the court noted that the case highlighted the complexity of balancing the needs of traders to publicise their terms and conditions with the needs of consumers to access and understand those terms. They concluded that, given a decade has passed since the last report of the Law Commission, the time might be ripe for another, evidence based, review of this area of law.

Watch this space.

Judgment: Parker-Grennan v Camelot