There is an exceptional case for the signers if there is presence of fraud and misrepresentation of contractual terms in the document they signed. Tilden Rent-A Car v. Clendenin is the leading case for this matter. In this case, Clendenin hired a car. He was told if he bought the extra option, he would get offer “full-non deductable coverage” for damage to his car. Then he signed the contract with Tilden due to the consideration of the offer brought into his attention. Later, he had accidence and the case was brought into the court as the offer was not done. The defendant claimed there was an exclusion clause “no responsibility for damage” in the contract. However, in fact he signed the contract due to consideration of another exclusive clause. Consequently, the Court held Clendenin was not bound for the signature on the contract because of misrepresentation of contractual terms, regarding to the similar case named Curtis v. Chemical Cleaning Co (1951). This led to the result that Clendenin was not bound for signing the contract when there was misrepresentation when contract was made. (Cited http://www.austlii.edu.au/au/journals/QUTLJJ/2001/4.html, retrieved on 6th December 2009)
On the other hand, it is possible for the exemption clauses in unsigned contract to become effective or useless. The ticket or receipt cases are likely to be focused on in this circumstance. The exclusion clauses on the back of receipts or tickets are totally ineffective as they are provided after the time contract has been finished. Thus in Sydney City Council v West (1965), West sued for the lost of his car due to the defendant’s negligence. The defendant relied on the exemption clause on the back of ticket which West got after going to the defendant’s garage excluded the defendant’s liability for loss car. The Court held that the exemption clause was not valid and not incorporated into the contract. (Cited http://www.angelfire.com/journal2/evil_cult/law100-149.html, retrieved on 6th December 2009).
Another thing to focus on is the case which is quite similar to the tickets cases, unless notice of exemption clauses given before the time contract was made, the notice will not being incorporated into the contract. Then, the exemption clause is unacknowledged. Olley v. Marlborough Court Ltd (1949) is the best illustration for this case. The plaintiffs are the couple booking a room in a hotel and paying at the reception was done. They receipt key to go the room and saw a notice in the room wrote that “the hotel will not liable for lost or stolen article…” Later, some plaintiff’s properties were stolen and they sued. The defendant used the exemption clause which was the notice to rely on. The Court held the contract had been done at the time the couple did the payment at the reception, so the notice is not incorporated into the contract because it was too late to give another party the notice. (Chandran 2006)
Nevertheless, the case is still about unsigned contract and there is difference in the way notice of exclusion clause given, then the result can be result in another way. More obviously, if the notice of exemption clause is given to a party reasonably, so the party can receive the reasonable notice of the clause. Therefore, the part is still be bound by the exemption clause. An example for this is the case of Parker v. South Eastern Railway Co. The plaintiff sued the company for the loss of his bag. The respondent claimed the notice of exemption clause was given to the passenger who is the plaintiff on a cloakroom ticket, but he ignored it. It was held that the company did provide you reasonable notice of exemption clause’s presence to aware the condition, so the plaintiff’s action failed. (Chandran 2006)
Actually, there are cases that the party is bound by exemption clause because it appears in the past signed contracts. Particularly, when the parties have deal with each other in written contract for a number of times, the exclusion clause belong to what is called “past dealing”. This problem is explained more clearly by McCutcheon v. David MacBrayne Ltd. The plaintiff had been dealing with the defendant for the past few times. Sometimes he signed a “risk note” but sometimes did not. The plaintiff sued for the freight in fee which was not done by the suspect, like the contracts made in the past. Then the defendant claimed that in the latest contract, he did not signed the contract containing exemption clause wrote he was the one who had to pay the fee, when he refused to pay the fee. The Court held this case would be insisted on the written contracts that are made in the past, according to course of dealing, so the defendant must pay the freight in fee which is the exemption clause already from the past dealing contracts. (Cited http://www.lawteacher.net/contract-law/cases/exclusion-clauses-cases.php, retrieved on 10th December 2009)
The exemption clause establishes the point of interpretation successfully when the clause brought to progress to examine the words so that the Court can determine if the oral promise can be counted as a part of contract or not.
The oral promises which are different from the terms in the written contract made by a party before the time contract was completed will be seen as valid terms of contract. The exemption clause that is in written contract in these situations becomes invaluable and replaced by oral promises. In Routledge v McKay (1954), the oral promise provided by the defendant to supply the plaintiff the model of 1942. It was before the time they went into the contract. Later, the model of 1930 is given for the plaintiff, not the 1942 one. The plaintiff sued for damage. The Court held for the plaintiff’s action to fail as the oral promise given before the terms became printed clauses, so that exemption clause is not counted as a part of the contract. Therefore, the defendant was not bound for it. (Cited http://www.lawteacher.net/contract-law/cases/exclusion-clauses-cases.php, retrieved 10th December 2009)
QUESTION 2
Common Law - Advice
Section (a)
In this case, the exemption clause relating to common law is focused on. Particularly, this is the case of tickets or receipts that try to introduce an exemption clause after the contract has been made. Therefore, this exemption clause is ineffective as it is not corporate into the contract. This result refers to the case of Chapleton v Barry Urban District Council (1940)
As a result, the exemption clause in this case cannot apply to a contract that had been finished. This is based on the common law creating by Chapleton v Barry Urban District Council (1940), the contract was completed at the time the person paid for hiring fees and then, he receipt a ticket. The exemption clause found on the back of ticket would be binding the other party, not the person who receipt the ticket.
What happened in the current case is also similar to the case of Chapleton case when after the contract was made, he was given a receipt that contained a clause seeking to exclude the liability from damage or injury from other party and that exemption clause is unreasonable and invalid. Therefore, the party A who is injured in this case is advised to bring into an action against the party B on the strength of common case of Chapleton v Barry Urban District Council (1940). (Khoury and Yamouni 2003, pg.166)
Section (b)
What happened in this case is quite similar with the case of section a. However, there were previous dealing between A and B several times. Therefore, the affect of exemption clause in this case will be different. The exemption clause of this case is reasonable and valid. This outcome is the result of the case J Spurling Ltd v Bradshaw (1956).
This leads to the fact that the exemption clause is an formed part of the contract. This common law was the outcome of the case of J Spurling Ltd v Bradshaw (1956). Although the clause was given after the contract was made, the party already knew the existence of the exemption clause due to the past dealings. The notice of the exemption clause is reasonable in this situation as the party must know the clause, so the party who received the ticket containing the exemption clause would be bound.
The case between A and B is the same with Spurling Ltd case. There were several times that A and B had contract and A had been given receipts many time, so A must know the presence of the exemption clause. It is unreasonable for A to say that he did not know about the clause as he did not bother to read it. Therefore, A is advised that he should not bring this case into court as A will be bound by the exemption clause from the tickets of past dealings between he and B. This action is taken from the case of J Spurling Ltd v Bradshaw (1956). (Khoury and Yamouni 2003, pg.173)
Reference
Andrew Phang Boon Leong (1988). Cheshire, Fifoot and Furmston’s Law of Contract Second Singapore and Malaysian Edition. Singapore-Malaysia-Hong Kong: Butterworth Asia.
Tabalujan and Toit-Low (2006). Singapore Business Law, 4th Edition. Singapore: Business Law in Asia.
Cited http://www.gillhams.com/articles/400.cfm, retrieved on 4th December 2009
Cited http://www.austlii.edu.au/au/journals/QUTLJJ/2001/4.html, retrieved on 6th December 2009
Cited http://www.angelfire.com/journal2/evil_cult/law100-149.html, retrieved on 6th December 2009
Chandran (2006). Introduction to Business Law in Singapore, 3rd Edition. Singapore: McGraw-Hill.
Cited http://www.lawteacher.net/contract-law/cases/exclusion-clauses-cases.php, retrieved on 10th December 2009
D Khoury and S Yamouni (2003). Understanding Contract Law, 6th Edition. Australia: LexisNexis Butterworths.
