On 17 and 18 April 1949, at two days on which football was being played. the claimant filled in three football pool coupons from Sport-Toto GmbH, the defendant, and handed them over with the corresponding stake money of DM 15 to the owner of the restaurant Sch in K. Mrs. Sch had not been appointed by the defendant as a betting office, but had been commissioned by W, the defendant's betting office in W near K, to accept bets. She accepted the coupons, affixed the respective stake stickers unto them and marked them with the defendant's stamp. She handed over to the claimant the A sections of the coupons for the participant to keep. Sections B and C of the coupons for two entries, intended for the defendant were forwarded by her, but those for the third remained at her place and were found there after Sport-Toto's final accounting for the event. This third entry had won a total of DM 22 500. By registered letter of 22 April 1949, the claimant sent the defendant the A sections of the coupons for this entry in his possession and demanded payment of his share in the winnings. The defendant refused payment, since the coupon parts B and C had not been received in time by the central office in Koblenz and not gone through the proper checks as set out in the agreed betting terms. The then applicable betting terms as printed in excerpts on the reverse of the coupons stated:

"Art. 5 As long as in special cases no other provisions have been agreed, the stake and the coupon must be in the possession of Sport-Toto GmbH no later than Friday, 6 pm. All coupons received thereafter are invalid.
Art. 8 The risk and hazard inherent in correct receipt of the coupons by Sport-Toto GmbH is borne by the participant.
Art. 9 Without any right of defence, coupons will not participate in the event which
a) ........
b) ........
c) have not yet been received by Sport-Toto GmbH by the close of the counting of all participants in each event....
d) .........
Art. 13 All appeals against the determination of winners must have been received by the Central Office within 10 days after the day of the event ....."

These conditions were later on amended.

The claimant brought an action for payment of his partial amount totalling DM 6, 100. The defendant refers to the fact that receipt of the coupon sections by the central office is a precondition for any claim for a win and that the risk and hazard involved in such receipt taking place lies with the participant. A receipt by the betting office alone does not suffice. Furthermore, Mrs. Sch had no authority to accept bets.

Both lower courts have rejected the claim. The further appeal results in a quashing of the judgments; the case is referred back for further deliberations.

Reasons

The appeal court bases its decision on the assumption that a valid betting contract was concluded by the parties. It leaves undecided whether or not the restaurant Sch. had been a betting office recognised by the defendant, or the defendant had generally prohibited the setting-up of sub-offices or had known of Mrs. Sch.'s activities. It merely states that the defendant had in any case accepted and treated as valid coupons to which Mrs. Sch had affixed with the stake stickers and which she had subsequently stamped. From this fact the court deduces that the defendant must therefore accept the consequences arising from the appearance that an authority legally existed. The appeal court also presumes a timely receipt of the claimant's coupon in the sense of Art.5 of the betting conditions, but it holds that the claimant's right to his win has lapsed since the pre-requisites of Art.9 c are not fulfilled as the particular part of the coupon had not reached the defendant's central office in time. In view of Art.8, the appeal court rejects the award of damages for vicarious liability. The participant had accepted all risks and hazards for a timely arrival of the betting coupons at the defendant's office. The defendant had thus excluded any vicarious liability in respect of the coupons' transmission.

Presuming initially, as the appeal court does, that it appeared as if Mrs. Sch, the landlady of the restaurant, had legally been authorised and that a legally valid betting contract had been concluded, the interpretation of the respective betting conditions on which the appeal court bases its decision can, however, not be followed. These conditions are typical terms of contract on which the defendant without exception based all its betting contracts. They were printed on the contract forms. The court of further appeal has the unrestricted right to interpret such terms of contract.

If the landlady Sch must be regarded as one of the defendant's betting offices with full power of agency, then, in the absence of any expressed limitation, her apparent authority covered receipt of all declarations to be made to the defendant and also the performance of all actions which were necessary in order to claim a win. A restriction of such authority can especially not be deduced from the fact that the defendant , in Arts. 5,8 and 9 of the betting conditions sometimes refers to the Sport-Toto betting offices and sometimes to Sport-Toto GmbH as recipients for the betting coupons. There is no apparent intention to differentiate between these two kind of recipients. According to Art.5 in particular, the betting offices are empowered to accept the entire coupons with all their sections, as the appeal court rightly presumed. It is only in Art.13 that the period of time, during which any objections may be raised, is clearly linked to the receipt of the coupons by the central office.

A sufficiently clear distinction can also not be derived from the fact that the provisions of Arts. 5, 8 and 9 would partially overlap if one were to assume that the Toto betting offices and Toto GmbH are on an equal footing. General conditions of contract like these are not always the result of a full and correct legal study of the situation and thus do not per se justify the application of strictly logical principles of interpretation, as is necessary in the case of legal provisions. They are directed at a wide audience of contractual partners most of whom are unfamiliar with the law, for which reason they must be precise and clear without recourse to logical deductions. Furthermore, there is still scope for the application of Art. 9 c in addition to Art.5, even if one equates the Toto betting offices with Toto GmbH, i.e. in those cases, which are exempt from the general rules of Art. 5; and Art. 8 remains applicable for cases in which the participant does not use the betting offices for the transmission of the coupons. In any case, the wording of Art. 8 does not make it absolutely clear that the defendant, by this provision, intended to exclude liability for his own fault and those of his agents in respect of the transmission of coupons, a task which he had taken on himself and over which the participant had no influence whatsoever. If the defendant intended that these provisions meant something else, he has not made this sufficiently clear. The defendant carries the risks for any possible doubt in respect of the wording, since he could have phrased the provisions more precisely (see RGRKomm, n.3 to para. 157, 9. ed., p. 343; RGZ 120,18 [20]; RGZ 145, 21 [26]). Given the present wording of the betting conditions, the participant could assume that he had fulfilled all preconditions for claiming a win once he had handed in the betting coupon at the betting office in time.

Nonetheless, the claim is not yet ready for a decision along the line of the court of further appeal's reasoning. The appeal court's findings insufficiently prove the landlady Sch's authority as a result solely of the appearance of such a right. Against the principal, the contractual partner can plead such apparent authority in cases, where he could assume in good faith that the principal knew and tolerated the behaviour of the agent who acted for him. The appeal court held without error in law that this was so in respect of the claimant, who not only received the betting coupons from the landlady Sch but also recognised that she held the defendant's stake stickers as well as the stamp to cancel them. But the court fails to realise, that a further pre-requisite must be present on the part of the principal, i.e. that he, if using all necessary care, should have realised what the agent was doing and could have prevented it (see RG HRR 1931, 529; Düringer-Hachenburg HGB Part I, 479; Staudinger, 10. ed., n. 9 to para. 167).

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