LAWS1015 Lecture 10

Question 1

(Darlington Futures v Delco)

Answer 1

P: exclusion clauses are to be construed “according to its natural and ordinary meaning, read in the light of the contract as a whole, thereby giving due weight to the context in which the clause appears including the nature and object of the contract.”

F: undertook unauthorised day trading. Clause 6 did not protect because the words plainly referred to activity undertaken by the broker with the client’s authority. Clause 7 did limit the broker’s liability to $100 because an unauthorised transaction nonetheless had a “connection with the relationship of broker and client”.

Question 2

(Wallis Son & Wells v Pratt & Haynes)

Answer 2

P: If the ordinary principles of construction are insufficient/result in ambiguity, then secondary rules can apply. The exclusion clause should be construed “contra proferentem” against the person who stands to benefit.

Question 3

(City of Sydney v West)

Answer 3

P: The exclusion clause does not cover acts outside the “4 corners” of the contract

F: exclusion clause for negligence, did not contemplate an exemption for acts that were not authorised/permitted by the terms of the contract. Carpark attendant by handing over the duplicate ticket constituted an unauthorised delivery of possession. (isn’t this negligence?)

Question 4

(TNT v May & Baker)

Answer 4

P: The exclusion clause will not provide protection once the carrier deviates from the agreed course. Need to show that the deviation caused the loss. (e.g. if it happened before, or would have happened anyway).

F: in accordance with TNT’s practice, driver took goods home and stored them in a shed. Shed caught fire, goods damaged.

Question 5

(Canada SS) Rules

Answer 5

1st: Whether the words used are wide enough in their ordinary meaning to cover negligence? If doubt arises, must be construed contra proferentem.
2nd: Whether the head of damage may be based on some ground (not so fanciful or remote) other than negligence?

P: Even if the exclusion clause is wide enough to cover negligence, it will not apply if there is some other ground which liability may be based (e.g. contract).

Question 6

s64, s64A ACL

Answer 6

s64: a term is rendered void if it purports to exclude, restrict, or modify the application of a consumer guarantee regime.

s64A: contracts for the supply of goods/services that are not of a kind ordinarily acquired for personal/domestic/household use, an exclusion clause may be valid if it limits liability to replacement of the goods, repair, payment of the cost of replacement, or payment of the cost of repair.

Question 7

(Coulls v Bagots)

Answer 7

D: The privity doctrine operates to prevent non-parties from enforcing contractual promises that benefit them.

F: The fact that Doris Coulls had signed the agreement did not make her a party to the contract. Dissent: Signature was explicable only on the basis that she was intended to be a party to the agreement.

Question 8

(Trident Insurance v McNiece Bros)

Answer 8

P: exception to allows 3rd party referred to in an insurance contract, to maintain an action against the insurer.

P: The privity rule doesn’t apply if an agency relationship can be established because the non-involved is nevertheless a party to the contract. It must be shown that the principal expressly (words) or impliedly (prior habits, course of dealing) consented to the agent acting on his/her behalf.

P: Under a trust, the beneficiary is not a party to the contract but the trustee will have an obligation to enforce the contract on behalf of the beneficiary. Express words that evince an intention to create a trust is needed.

Question 9

(Scruttons v Midland Silicones) affirmed by HCA (Port Jackson Stevedoring)

Answer 9

Contracts of carriage.

1st: contract has to make it clear that stevedore was intended to be protected by exclusion clause.
2nd: contract makes it clear that party was also contracting on behalf of stevedore as agent.
3rd: party has express/implied authority from stevedore to do so, or later ratification would suffice.
4th: consideration provided (e.g. unloading the goods)

Question 10

(Beswick v Beswick)

Answer 10

P: Where promisee is willing or obliged by a trust to sue on behalf of 3rd party, promisee may only be entitled to nominal damages because they have not suffered the loss themselves. Specific performance may be granted which will direct the party to perform (i.e. pay the third party). Specific performance is a discretionary remedy, granted where damages are inadequate.