New Seminar 17 (for students) PDF

Preview

Summary

Download New Seminar 17 (for students) PDF

Description

SEMINAR 17 – EXCLUSION CLAUSES INTRODUCTION TO COMMON LAW AND LEGISLATIVE PROVISIONS Following on from the Seminar 16, you have been provided with additional facts relating to Belinda and her contract with Sherwood Rapid Transport Plc. In addition to the common law principles of incorporation already discussed, consider the remaining common law and legislative provisions that are relevant to the facts below.

Belinda went to the local train station in order to travel into Sherwood city centre. The trains were owned and operated by Sherwood Rapid Transit Plc. Belinda had often travelled on the company’s trains in the past on her way into the city. In order to obtain a ticket, Belinda inserted some coins into an automatic machine and the machine issued a ticket. On the face of the ticket appeared the words, “Issued subject to the company’s conditions of carriage.” A sign displaying the conditions of carriage was normally displayed adjacent to the machine but it had been temporarily removed pending refurbishment of the station. Belinda went down a flight of steps to the platform where there was displayed a notice headed “Conditions of Carriage”. One of these conditions stated: “The liability of the company or its servants for loss or damage is limited to the sum of £75.” Belinda boarded the train. Owing to the negligence of the train driver, when the train arrived at its destination, it was involved in a minor collision. Belinda fell over and suffered injuries. Belinda’s new digital camera, worth £400, was damaged beyond repair.

Advise Belinda. (1) Clause – exclusion/limitation Limitation of liability clause – seeks to limit liability to £75 (2) Liability? Negligence resulting in personal/physical injury and property damage (3) Incorporation of the clause? Signature, notice and previous course of dealings. Ticket – valid incorporation of the clause via the ticket?  Notice must be on a contractual document (Chapleton v Barry),and notice must be given before or at the time of contracting (Olley v Marlborough Court; Thornton v Shoe Lane Parking). There is no valid incorporation via the ticket. Was there incorporation by the sign that had been removed?  Not reasonable notice (Thompson v LMS Railway) Was there incorporation by the sign on the platform?  No, the sign appeared after contracting (Olley v Marlborough Court), and therefore would not incorpatre the clause Therefore, the only method of incorporation that could be effective is previous

course of dealings. Those dealings must have been consistent and there must be an element of regularity (McCutchen v MacBrayne; Hollier v Rambler Motors). The frequency element is satisfied given that Belinda had ‘often’ travelled by train in the past, and therefore if the signs were always present and visible when Belinda travelled in the past there will have been consistent course of dealings, and there will be valid incorporation. (4) Construction of clause Does the wording of the clause actually cover the negligent liability of the train company? “The liability of the company or its servants for loss or damage is limited to the sum of £75.” Contra Proferentum – any ambiguity (or uncertainty) in the wording of the clause will be construed against the person seeking to rely on the clause (Houghton v Trafalgar insurance) Unlikely to apply here, as the clause is very clearly worded. If the clause is seeking to cover negligent liability then the court will refer to Canada Steamship v R. This helps to determine: (i) Does the clause expressly reference negligence? – Not applicable here (ii) Are the words wide enough to cover the negligent liability? – (Ailsa Craig Fishing – Lord Wilberforce = the courts are generally more open to see the enforceability of clauses which limit liability rather than exclude it, and therefore the court will be more generous when reading a limitation clause) – a more generous reading might allow ‘liability’ to cover negligence, and might allow ‘loss or damage’ to cover the physical injury and property damage. (iii)Even if the words are wide enough to cover negligent liability, could the party be held liable under another head of liability? Might there be a liability arising as a result of the CRA (Consumer Rights Act) or as a result of UCTA? (5) Does the clause satisfy legislative requirement? Consumer Rights Act = consumer to business/trader Unfair Contract Terms Act = Business to Business Belinda – consumer or business?  S2(3) CRA = individual acting for purposes that are wholly or mainly outside that individual’s trade, craft, business or profession. It’s likely that Belinda is in fact a consumer, as it appears she is not travelling for business.  S1(3) UCTA states that the Act generally applied in business to business contracts. We have concluded that Belinda is a consumer, and therefore UCTA will not apply. CRA 0215 – there can be no exclusion for liability with respect to personal injury or death (s65(1)) With respect to Belinda’s injuries, the train company cannot exclude liability and they will be liable to pay her compensation Contracts for services cannot exclude liability for negligence – Chapter 4 of the CRA 2015 S49 – clause implied into every contract that any service will be undertaken with reasonable skill and care. The business cannot exclude this implied term in the contract. = breach of S49 of the CRA 2015, therefore train company will be liable for breach of contract. Conclusion – the clause may have been validly incorporated via previous course of dealings, however this is not clear on the facts. Whilst the clause may have successfully covered negligent liability, it will not cover liability imposed under the Consumer Rights Act 2015. As a result the train company will be liable for both the personal injury (s65(1)) and for the property damage which resulted from the driver not utilising reasonable care and skill (s49).

Reading and Lecture Materials: Lecture Materials for Lectures 16, 17 and 18 Murray, Contract Law – Fundamentals Chapter 7...