Contract Law - Exemption Clauses Case Law

Front 1

L'Estrange v Graucob Ltd [1934]

Back 1

Incorporation (Signed Documents)

Claim dismissed; Scrutton LJ - no fraud, hence C is bound; irrelevant if she read document or not

Front 2

Curtis v Chemical Cleaning & Dyeing Co [1951]

Back 2

Incorporation (Signed Documents)

Claim allowed; There was an innocent misrepresentation here, but as nonetheless a false impression had been created, D liable

Shopkeeper for D had wrongly told C of scope of limitation of liability, when damage done to C's dress, she found out that limitation covered more areas than represented

Front 3

Chapelton v Barry Urban UDC [1940]

Back 3

Incorporation (Unsigned Documents - reasonable notice)

Claim allowed; Exclusion clause will only be incorporated if document could be reasonably expected to contain contractual terms (i.e brought to consumer's attention)

Front 4

Parker v South East Railway Co

Back 4

Incorporation (Unsigned Documents - notice)

Claim allowed; ticket had clause at the back but court held that D had not brought it to C's attention, hence it was not incorporated

Mellish LJ - reasonable = ordinary adult individual able to understand english

Front 5

Thompson v LMS Railway Co [1930]

Back 5

Incorporation (Unsigned Documents - notice)

Only reasonable, not actual, notice is required; C was held to be bound by terms as despite her being illiterate, reasonable would be an ordinary adult individual capable of reading english

Front 6

The Mikhail Lermontov [1991]

Back 6

Incorporation (Unsigned Documents - incorporation by reference)

Terms printed on a separate document; claim successful;booking form did not do enough to draw attention to terms

Front 7

Spurling v Bradshaw [1971]

Back 7

Incorporation (Unsigned Documents - Unusual clauses/ previous dealings)

Gave rise to Lord Denning's Red Hand rule - unusual clauses need to be printed in red ink with a red hand pointing to it

Also held that even though exclusion clause not received until contract formed, clause incorporated due to regular dealings involving the similar documents which were never protested

Front 8

Thornton v Shoe Lane Parking [1971]

Back 8

Incorporation (Unsigned Documents - notice)

Illustrates that high degree of notice required, in that D had failed to take sufficient steps to bring to C's notice exclusion clauses before formation of contract

Front 9

Interfoto Picture Library v Stiletto Visual Programmes Ltd [1988]

Back 9

Incorporation (Unsigned Documents - Unusual clauses)

Attention must be drawn to unusual clauses in the most explicit way

Front 10

O'Brien v Mirror Group Newspapers [2001]

Back 10

Incorporation (Unsigned Documents - Unusual clauses)

Relaxed Interfoto principle - test reduced to whether rules were fairly and reasonably brought to C's notice, depending on circumstances and nature of term

Front 11

Kaye v No Skin UK Ltd [2009]

Back 11

Incorporation (Unsigned Documents - Unusual clauses)

Interfoto principle only applies to commercial contract between individual, inexperienced business person and a franchise company (i.e narrows it)

Front 12

McCutcheon v David MacBrayne Ltd [1964]

Back 12

Incorporation (Unsigned Documents - previous dealings)

Illustrates principle that parties must deal with each other on a regular basis on standard T&Cs

Front 13

Photo Productions Ltd v Securicor Transport Ltd [1980]

Back 13

Construction (Type of contract/ Court's general approach to construction)

Lord Diplock - courts will presume that parties intended to accept implied obligation, hence exclusion clauses construed strictly, depending on degree of departure from implied obligations

Courts will be stricter in interpretation of clauses in commercial contracts

Front 14

Houghton v Trafalgar Insurance Co Ltd [1951]

Back 14

Construction (Contra Proferentem Rule)

C successful; Illustrates rule - term was narrowly interpreted against D

Front 15

Alderslade v Hendon Laundry Ltd [1945]

Back 15

Construction (Exclusion of negligence)

Lord Greene - if clause seeks to exempt liability for damage suffered from negligence, it has to be very specific (extending to that particular head of damage)

Front 16

Canada Steamship Lines v The King [1952]

Back 16

Construction (Exclusion of negligence)

Test to determine negligence introduced:

If clause only seeks to exclude negligence, needs to be clearly and unambiguously stated

No express reference to negligence = need to determine if words wide enough to cover negligence

If there is more than one head where liability can be grounded, exemption will only apply to liability in contract