Enforceability of Exclusion Clause in Australian Commercial and Corporation Law

AUSTRALIAN COMMERCIAL AND CORPORATION LAW
STUDENT ID:
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Question 1
Issue
The objective is to ascertain whether providing the parking ticket to Marcus would validate
the enforceability of exclusion clause and thereby allowing the parking operator to defend
itself. The applicability of exclusion clause would also be determined for the case where the
parking staff acted negligently resulting in car being stolen. The legal remedy would also be
offered to Marcus in relation to his claim about the compensation with respect to the loss of
his luxury car from the parking operator
Law
Exclusion clause is a special type of contractual term whose objective is to limit liabilities of
the inserting party towards the other party for certain events. The exclusion clause would
become enforceable on both the contracting parties when the following conditions are
satisfied by the contracting parties (Andrews, 2014).
One of the imperative aspects is that the clause inserting party must inform the other party
about the exclusion clause before entering into legal contract. In other words, it is essential
that the party takes necessary efforts to bring the exclusion clauses to the notice of the other
party before contract formation. This would provide an opportunity to the other party to
provide an informed consent for the clause. Further, it is noteworthy that if the other party
does not read the clause even after the inserting party has taken reasonable efforts, then the
exclusion clause can be held as valid (Gibson & Fraser, 2014).
However, exclusion clause will not be applicable when the inserting party does not take any
reasonable steps to inform the other party about this contractual term before the execution of
contract (Latimer, 2016). The decision announced in Thornton v Shoe Lane Parking [1971] 1
All ER 686 case is the evidence of this underlying aspect. Mr. Thornton took the parking
ticket from the Shoe Land Parking after parking the car in to parking slot. The ticket
contained the exclusion clauses regarding the safety/security and responsibility of the vehicle.
The plaintiff was injured while parking the car and thus, made a claim for his injury from
parking owner. The owner of Shoe Land Parking did try to defend himself by indicating the
fact that the ticket had exclusion clause stated at the backside of the ticket. It was apparent
that company has not provided the ticket before the car parked at the parking slot through
automatic dispense machine. It highlighted that company had informed Mr. Thornton about
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exclusion clause of the company after the enactment of the contract and hence, the exclusion
clause was not held as valid (Davenport & Parker, 2014).
An additional requirement is that the plaintiff must be aware of the existence of exclusion
clause as in certain cases the plaintiff may not be aware that the invoice or ticket handed
would contain contractual terms. In such scenario, the exclusion clause is not held valid even
though the ticket or invoice may be given before the contract formation (Edlin, 2017). Also,
in cases of protection from negligent conduct using exclusion clause, it is required that the
insert party must explicitly inform the other party that the exclusion clause has been inserted
with the intent of escaping negligence related liability (Taylor & Taylor, 2015).
Question 2
Application
Marcus who drives a luxury car has taken the car to park at the Park Safe parking area
considering the fact that it provides safe and secure parking space in Sydney. Also, one
security representative of the company is present round the clock at the Park Safe. When he
entered into the parking area, a representative of the car parking operator issued him the
parking ticket which held information related to the parkin slot location, ticket expiry timing
and date of issuing the ticket. Further, the back side of the ticket contained the details related
to the exclusion clause. Marcus does not bother to read the back side of the ticket and just
read the front information and parked the car at the specified area because the back-side
information is written in very small font size which makes it problematic to read. One day,
when he returned back from his work, he noticed that someone had attempted to steal the car
thereby causing damage to car. Due to this, Marcus became way too angry and reached the
attender and notified him about the damages and missing parts. It is also noticeable that he
left his key inside the car only when he was angry and approached the attender. Also, when
he came back from attender’s office, he noticed that his car was stolen.
Company has given the ticket which contains the exclusion clause before the execution of the
contact. This is because contract between Marcus and company was enacted when he parked
the car at the specified premises. Thus, it can be concluded that ticket has issued to him well
before the contract enactment. However, the company has not taken necessary steps/efforts to
inform him regarding the exclusion clause on the back side of the ticket. Further, despite
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