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CHAPTER 2

THE WEAPONS OF LAW

2.2.2The Exemption Clause
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The party putting forward (the proferens) the contract document often sets out, within its terms, limiting or onerous conditions that will be imposed on the other party. These limiting or onerous conditions constitute, or have equivalence to, ‘exemption clauses’ in the contract that generally favour the proferens.

A person who signs a document which contains contractual terms is normally bound by them even though that person has not read them and is ignorant of their precise legal effect.14

But where there is no signature, in order that a term should become binding as part of the contract it must be brought to the notice of the contracting party before or at the time that the contract is made.
14A


The general rule is that notice of a limiting clause, given after the contract is concluded, cannot bind the other party.
15


 

Consider the following Cases:


In the leading English case of Olley v Marlborough Court Ltd.(1949, England) the defendant let a hotel room to a husband and wife. At the time of checking into the hotel, the defendants obtained payment in advance for a one-week stay. On arriving in the hotel room, the husband and wife for the first time were made aware, in the form of a printed notice, that the hotel proprietor sought to exclude liability for theft or loss of articles of property unless handed to the hotel management for safekeeping. The wife left the hotel room and left the key downstairs in reception. The key was taken by a thief who stole her furs. The defendant unsuccessfully pleaded the notice excluding liability. The majority of the Court of Appeal held that the notice was not part of the contract because the contract had been formed at the reception desk prior to entry into the room.15A


In Thornton v Shoe Lane Parking Ltd
. (1971, England) Denning M.R. used the same line of reasoning in the context of a contract whereby the plaintiff (Thornton) was permitted to use the defendants’ multi-storey car park. Entry was effected by way of an automatic barrier, the barrier being operated through a ticket machine. While the ticket contained a notice that the ticket was issued subject to conditions displayed on the premises, actual notice of the terms could only be given to members of the public after entry into the building. Denning M.R. opined that the offer was made via the terms stated on the outside of the building and that the offer was accepted by approaching the barrier and taking the ticket; the contract was concluded on terms which did not include the terms found within the building.15B The machine caused the ticket to be issued when the car was driven to the entrance of the garage, and the customer could not be affected by conditions brought to his notice after this time.16


A person who suffers loss by reason of an invalid exemption clause being imposed on him can seek redress through the Court for any loss suffered. But, as we shall see later in this Chapter, where there has been a misrepresentation (and misrepresentation can exist even in ‘silence’) the guilty party will have exposed himself to a liability in damages.



14, 14A, 16 Beatson, Burrows and Cartwright, Anson’s Law of Contract, (29th ed.), p. 173.

15, 15A, 15B Clark, Contract Law in Ireland, (6th ed.), p. 189.

 

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