Exclusion Clause
Assignment Answers – Part B
Question 3
Joe claims that Betty’s Drycleaning Service (BDS) is responsible to compensate him for the loss of his dinner jacket and the damage to his trousers. He is claiming $500 as the replacement cost of a new suit.
BDS, through its new owner, Bruce, is denying responsibility for this loss and damage due to an exclusion clause on the docket handed to Joe (as usual) when he left his items to be dry cleaned. Bruce also points to a sign at the back of the shop which also excludes liability.
This question is concerned with the contents of the contract, in particular, the incorporation of terms into a contract. Sometimes terms are included in a contract which one of the parties denies having notice of, especially if these terms are contained in a document that is separate from the main contract. The rules in this area broadly depend on whether the document was signed or unsigned.
When Joe left his clothing at BDS he was not asked to sign a document, but was instead handed a docket containing an exclusion clause which BDS are now relying on to exempt them from liability. A docket is not the sort of document on which a party would expect to find contractual terms (Chapleton v Barry; Causer v Browne and Thrornton v Shoe Lane Parking).
For the exclusion clause to be a term of the contract, BDS must show that it was brought to the other contracting party’s attention at or before the time the contract was entered into (Olley v Marlborough Court). BDS will point to the large sign at the back of the shop with the same words printed on it. How visible the sign is to customers is a question of fact. Does “back of the shop” mean behind the counter? Is it far away and generally concealed by racks of clothing? If BDS can prove that the sign was displayed in such a way that it had obvious contractual significance then it could be a term. Joe would be deemed to have constructive notice of the term.
BDS could also claim that Joe
Question 3
Joe claims that Betty’s Drycleaning Service (BDS) is responsible to compensate him for the loss of his dinner jacket and the damage to his trousers. He is claiming $500 as the replacement cost of a new suit.
BDS, through its new owner, Bruce, is denying responsibility for this loss and damage due to an exclusion clause on the docket handed to Joe (as usual) when he left his items to be dry cleaned. Bruce also points to a sign at the back of the shop which also excludes liability.
This question is concerned with the contents of the contract, in particular, the incorporation of terms into a contract. Sometimes terms are included in a contract which one of the parties denies having notice of, especially if these terms are contained in a document that is separate from the main contract. The rules in this area broadly depend on whether the document was signed or unsigned.
When Joe left his clothing at BDS he was not asked to sign a document, but was instead handed a docket containing an exclusion clause which BDS are now relying on to exempt them from liability. A docket is not the sort of document on which a party would expect to find contractual terms (Chapleton v Barry; Causer v Browne and Thrornton v Shoe Lane Parking).
For the exclusion clause to be a term of the contract, BDS must show that it was brought to the other contracting party’s attention at or before the time the contract was entered into (Olley v Marlborough Court). BDS will point to the large sign at the back of the shop with the same words printed on it. How visible the sign is to customers is a question of fact. Does “back of the shop” mean behind the counter? Is it far away and generally concealed by racks of clothing? If BDS can prove that the sign was displayed in such a way that it had obvious contractual significance then it could be a term. Joe would be deemed to have constructive notice of the term.
BDS could also claim that Joe