'The club will not accept responsibility for any loss suffered by customers', would appear to be, what the dance club would define as, an exclusion clause - Discuss.
Marisa Cawthorne
Contract Law LW1021 Non-Assessed Coursework
Question 1
The notice: ’The club will not accept responsibility for any loss suffered by customers’, would appear to be, what the dance club would define as, an exclusion clause. However, a number of factors need to be taken into account before we can determine whether this exclusion clause is, in fact, legitimate. In terms of the common law (combined with statutes) we need to take into account three areas: ‘incorporation’ and ‘construction’, and more recently, legislation such as the Unfair Contract Terms Act 1977.
‘Incorporation’ refers to whether the exclusion clause is actually part of the contract witnessed and signed by both parties. There are no problems with incorporation as long as both parties know all of the terms contained in the contract. In this case, I would advise Robert and Lucy that the ‘exclusion clause’ is in fact, not part of the contract they agreed on with the dance club as they viewed the notice in the club after they had paid (their consideration). I justify my decision based upon the ratio decidendi of Olley v Marlborough Court, Ltd, 1949 where the exclusion clause was not considered to be a part of the relevant contract as ‘the plaintiff had not seen it until after she had been accepted as a guest’. Legislation also supports this. For example, the Unfair Terms in Consumer Contracts 1999 has a list of unfair terms which can be considered unfair: ‘terms which have the object or effect of... (i) irrevocably binding the consumer to terms with which he had no real opportunity of becoming acquainted before the conclusion of the contract’.
The type of notice of the clause can also be relevant here. The ‘red hand rule’, famously advocated by (the now) Lord Denning, says that ‘the more unreasonable a clause is, the greater the notice which must be given of it’. Obviously in Robert and Lucy’s case, the clause exempting the dance club from any loss suffered by customers could be considered extreme or unreasonable. Therefore a court would expect the dance club to have made every attempt to ensure the customers were aware of the clause. Although a big sign on the club door could be deemed reasonable, the printed clause on the back of the receipt leading to the notice does not seem to be an example of the club making every attempt to ensure the customers are aware of the exclusion clause. After all many customers do not look at a receipt and simply place it in their pocket. Mellish LJ establishes this point, saying ‘If a person… received a ticket upon paying the toll… might put it in his pocket unread’. However in the case of Parker v South Eastern Railway Co Ltd [1877], to put the clause on the back of the ticket after writing on the front something to the effect of ‘see back’, was deemed reasonable and that the company should not be held liable for Parker failing to read the clause.
