Published July 23, 2004
Court decisions are a critical source of information about the proper interpretation of the laws and rules that govern so many of our actions. Our goal with comments on case law is to provide you with an accurate summary of the main issues in the case, and to comment on the case's possible relevance. Keep in mind, however, that every case has unique facts and circumstances. Court decisions cannot be relied upon as legal advice because no two situations are exactly the same. Nonetheless, cases can provide valuable insights and taken together, they can offer guidelines for our conduct.
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Why This Case May Interest You
Contracts are an essential part of doing business and private organizations and individuals enter into contracts all the time. This case revolved around a simple little contract (a raffle ticket) and whether someone could unilaterally vary the raffle ticket's terms and conditions.
Summary of Facts
McKay bought a ticket in a lottery sponsored by a local sport club. It was later announced by the community radio station that she had won the first prize consisting of a boat, motor and trailer. The President of the Hockey Club had agreed at the radio station that the first ticket drawn would win third prize, the second would win second prize and the third would win the first prize. McKay's ticket was drawn third and it was announced that she had won first prize. Unfortunately, the tickets contained the following words: "winners will be declared in the order chosen in a random draw", that is, first name drawn will win first prize, etc. The prizes were subsequently awarded on the basis of the order drawn (McKay was drawn third). She sued the Hockey Club.
Did the words on the ticket form a binding contract or was the contract varied by the President when he made his comments on the radio show?
The Court found that according to the terms of the ticket McKay was the winner of the third prize and not the first. The third prize was a mere $500.00 gift certificate. The judge held that a lottery ticket is a contract and participation in the lottery indicated acceptance of the terms and conditions set out on the ticket. Unless there is express agreement to the contrary, the President of the lottery cannot unilaterally change the terms and conditions of the contract. McKay was left with gift certificate.
This case is an interesting example of a long line of court decisions that reaffirm the principle that contracts, once accepted, mean what they say and that attempts to make unilateral changes to their terms, without the consent of all parties to the contract, will usually be overturned by the courts. While this case dealt with an innocent mistake, the legal principle the court followed is applicable to all "contracts" between the parties. Such contracts might be associated with team selection decisions, employment matters, discipline or appeal policies and various business relationships.
There is danger associated with the creation of a contract when the contract clearly specifies one procedure or policy to follow and the organization elects to follow different steps or procedures. Such conduct by the organization may be subject to attack. If the terms of a contract (for example the detailed criteria contained in a selection policy) do not "fit" the organization, are incomplete or if they are outdated - have them immediately amended to reflect the mutual intent of the parties involved. Ignoring the "details" of what was previously agreed to has come back to haunt many unsuspecting organizations.