Exclusion of Liability

Question 1

Unfair Contract Terms Act 1977, section 11

Answer 1

1. In relation to a contract term, the requirement of reasonableness . . . is that the term shall have been a fair and reasonable one to be included having regard to the circumstances which were, or ought reasonably to have been, known to or in the contemplation of the parties when the contract was made.
2. In determining for the purposes of section 6 or 7 [UCTA] above whether a contract term satisfies the requirement of reasonableness, regard shall be had in particular to the matters specified in Schedule 2 to this Act . . .
3. In relation to a notice (not . . . having contractual effect), the requirement of reasonableness under this Act is that it should be fair and reasonable to allow reliance on it, having regard to all the circumstances obtaining when the liability arose or (but for the notice) would have arisen.
4. Where by reference to a contract term or notice a person seeks to restrict liability to a specified sum of money, and the question arises . . . whether the term or notice satisfies the requirement of reasonableness, regard shall be had in particular . . . to – (a) the resources which he could expect to be available to him for the purpose of meeting the liability should it arise; and (b) how far it was open to him to cover himself by insurance.
5. It is for those claiming that a contract term or notice satisfies the requirement of reasonableness to show that it does.

Question 2

Curtis v. Chemical Cleaning and Dyeing Co. Ltd 1951

Answer 2

C took wedding dress to D for cleaning.
Exclusion clause in receipt, assistant stated this covered beads and sequins.
Dress was returned stained.
Claim for damages by C.
Held: Claim successful.
Exclusion clause could not be relied upon because of statement by assistant.

Question 3

Olley v. Marlborough Court Hotel 1949

Answer 3

Couple stayed at hotel.
Contract of stay signed at reception upon arrival.
While out, key was taken from reception and items stolen.
Couple brought claim, hotel attempted to rely upon exclusion clause in room claiming guests leave items in room at own risk.
Held: Contract signed before guests visited room, exclusion clause not incorporated into contract.
Claim successful.

Question 4

Parker v. South Eastern Railway Co. 1877

Answer 4

C checked luggage in to station cloakroom.
Notice on receipt stated that station liability does not exceed £10.
C’s luggage, worth more than £10, stolen.
Held: C not made sufficiently aware of clause (Or at least the station could not prove they had) and so it was not incorporated into the contract.

Question 5

Chapelton v. Barry Urban District Council 1940

Answer 5

C hired deck chairs on beach, given tickets.
On ticket, exclusion clause stated that council was not responsible for injury resulting from their use.
C thought tickets were receipts, did not read.
Chair collapsed, C injured, claimed damages.
Council relied on exclusion clause.
Held: Attention not sufficiently brought to clause.
Claim successful.

Question 6

Thornton v. Shoe Lane Parking 1971

Answer 6

Drivers drove to barrier and took ticket, allowing entry to the car park.
Ticket stated that t&c’s were posted on premises.
Driver injured, claimed damages.
Company relied on exclusion clause for personal injury.
Held: Car park operators did not give sufficient notice.
Contract concluded upon raising of barrier, terms posted inside not incorporated.
Per Denning: The customer has no chance to negotiate. Ticket machine can not be reasoned with.

Question 7

Dillon v. Baltic Shipping Co. Ltd (The Mikhail Lermontov) 1991

Answer 7

Cruise booking form contained clause that contract of carriage subject to conditions printed on ticket, issued far later.
Ship sank, claimant injured.
Company relied on exclusion clause in contract of carriage.
Held: Damages claim successful.
Company did not do enough to draw attention to exclusion,mothers fore it was not incorporated.

Question 8

J. Spurling Ltd v. Bradshaw 1956

Answer 8

C and D had long standing arrangement for warehouse storage.
D brought eight barrels of orange juice to warehouse, receiving document acknowledging receipt of barrels a couple of days later.
Document also contained exclusion clause for any damage due to company or employees.
D picked up barrels to find them empty or full or dirty water, refused to pay storage charge.
C sued.
Held: Contract with exclusion clause not received until after contract had been formed, but due to their long standing agreement and receipt and adherence to other similar documents over that time, D was bound by terms.
INCORPORATION BY PREVIOUS DEALINGS

Question 9

Houghton v. Trafalgar Insurance Co. Ltd 1953

Answer 9

C was in car accident while carrying six people in a five seater.
D, insurance company, relied on exclusion clause based on excess load.
Held: Excess load could mean either too many passengers OR too much weight.
Given latter interpretation, leaving D liable for claim.

Question 10

Hollier v. Rambler Motors (AMC) Ltd 1972

Answer 10

C had had various works done on his car by D in the past.
Signed document with exclusion clause, which he had done at least two times before, stating that D would not be liable for damage resulting from fire.
Fire broke out due to faulty wiring in garage that had not been maintained or inspected.
C claimed for damages.
Held: exclusion clause not incorporated by previous dealing.
Clause was snot specific regarding negligence.
One would assume liability is attracted if fire results from D’s negligence.
Claim successful.