Standard Form Contracts & Exclusion Clauses - Incorporation

Question 1

Thornton v Shoe Lane Parking Ltd., 1970
(Reasonably Bring Attention to Exclusion Clause/Unsigned Contracts)

Answer 1

In order for an exclusion clause to be incorporated in a standard form contract, the exclusion clause has to have clear language of the nature of the clause, brought to your attention in the most explicit way possible prior to formation of the contract.
o The “most explicit way” could be a bright yellow sign prior to formation of the contract or a yellow highlight/capital letters on a document.
o If the party who created the standard form contract has done what a reasonable person should do to explicitly bring to the customer’s attention the limitation of liability before the formation of the contract, then the exclusion clause will be incorporated.
○ If the party who created the standard form contract has not done what a reasonable person should do to explicitly bring to the customer’s attention the limitation of liability before the formation of the contract, then the exclusion clause will be unincorporated.

Question 2

McCutcheon v David MacBrayne Ltd., 1964

Answer 2

Based on past conduct, they knew that this was subject to limitations of the liability that they signed before, therefore we can imply from past course dealings the exclusion clause into this relationship.
This is possible to imply an EC when: (implying in fact)
1. Based on the intentions of the parties
- Only the case if you had a consistent past practice and this time is only a oversight, so that it would be obvious that it was presumed to be based on the intentions of the parties.
- A mixed past practice (sometimes signing a form and sometimes not) does not support oversight and the inference that a reasonable objective person would believe the exclusion clause was part of the contract.

Question 3

Karroll v Silver Star Mountain Resorts Ltd., 1988 (Exception to Tilden)

Answer 3

Modification from Tilden Rent A Car Co: The only way to rebut the presumption from Tilden Rent A Car Co. and make an exclusion clause non-binding (exception) would be to show that:
1) the party who created the standard form contract have known or ought to have known that the signatory was unaware of the clause when they signed the contract, and did not intend to agree to the release she/he signed
- Factors to consider:
- look at the actual effect of the clause in relation to the contemplated activity.
· if it was a very odd clause that wouldn’t be consistent with the activity, then that would suggest that the company should have made this clause explicitly clear to the customer.
- circumstances of the time the party signed the contract
· Was it a dense and long contract?
· Was it a hurried signing or an opportunity to read it?
2) If step #1 is triggered then there is an obligation for the party who created the standard form contract to bring the exclusion clause explicitly to the attention of the other party, and that they took reasonable steps to do so.

Question 4

Tilden Rent A Car Co. v Clendenning, 1978
(Example of EC Unincorporated)

Answer 4

The presumption is that exclusion clauses that are signed are binding.
However, if the party presenting the document subjectively knew or objectively ought to have known of the exclusion clause or its extent or nature, then that will cast an obligation on the company to bring it explicitly to the other party’s attention before signing.
- If they do not bring it to their attention then the exclusion clause will not be binding.