UNFAIR CONTRACT TERMS Cause of action What kind of cause of action is alleged to be modif i ed or excluded by the contractual term? Incorporation Was the clause in question incorporated into the contract? Question of Construction Properly construed, does the clause cover the problem which has arisen, e.g. is the wording of the relevant clause apt to exempt the party seeking to rely upon it from the breach of duty (contractual or tortious) which has arisen INCORPORATION Note: there is nothing unique or special about incorporating exclusion/limitation clauses into contracts by the routes outlined below - any contractual term may be so incorporated. By Signature L'Estrange v Graucob [1934] 2 KB 394 "[T]he plaintiff, having put her signature to a document and having not been induced to do so by any fraud or misrepresentation, cannot be heard to say that she is not bound by the terms of the agreement because she has not read them." By 'Reasonable' Notice . Nature of the Document Parker v South Eastern Railway (1877) 2 CPD 416 Train station cloak room - bag deposited and fee paid. Ticket (believed to be a receipt) said 'see back'. Several clauses were on the back of the ticket. The last stated 'The company will not be responsible for any package exceeding the value of 101.' The bag wasworthmorethan10landitwaslostorstolen. Chapelton v Barry UDC [1940] 1 KB 532 Thompson v London, Midland and Scottish Railway [1930] 1 KB 41 1
. Time of the Notice Olley v Marlborough Court Ltd [1949] 1 KB 531 'The proprietors will not hold themselves responsible for articles lost or stolen, unless handed to the manageress for safe custody. Valuables should be deposited for safe custody in a sealed package and a receipt obtained.' · Unusual Terms Thornton v Shoe Lane Parking [1971] 2 QB 163 Interfoto v Stiletto Visual Programmes [1988] 1 All ER 430 By Course of Dealing Hollier v Rambler Motors [1972] 2 WLR 401 (Salmon LJ, CA) Clause: 'The company is not responsible for damage caused by f i re to customer's cars on the premises. Customer's cars are driven by staff at owner's risk.' British Crane Hire v Ipswich Crane Hire [1975] QB 303 Mccutcheon v MacBrayne [1964] 1 WLR 125 (Lord Devlin, HL: Scotland) INTERPRETATION/CONSTRUCTION The rules of construction, like the rules for incorporation, are of general application, and can be used in relation to all clauses within a contract, and not just exclusion/limitation clauses. However, it is in relation to the exclusion of liability that most case law has arisen. The rules of construction discussed below were originally devised to curb the worst excesses of exclusion clauses at a time when there was no legislation intervention to challenge the appropriateness of certain terms. Consequently, they are now rather less signif i cant than they were pre-1977 and must today be read in light of the House of Lords comments against strained construction in Ailsa Craig, Photo Production (see below), and Mitchell (George) v Finney Lock