Exclusion Clause and Unfair Contract Terms in Contract Law

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Contents
Part A........................................................................................................................................................................ 2
Issue...................................................................................................................................................................... 2
Law.......................................................................................................................................................................2
Application............................................................................................................................................................3
Conclusion............................................................................................................................................................4
Part B........................................................................................................................................................................ 4
Issue...................................................................................................................................................................... 4
Law.......................................................................................................................................................................4
Application............................................................................................................................................................5
Conclusion............................................................................................................................................................6
Reference List...........................................................................................................................................................7

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Part A
Issue
Whether the railway company could successfully rely on the exemption clause to protect itself from an
action by Mandrake?
Law
When one party (offeror) makes an offer to another party (offeree) which is confirmed by such other
party then there is acceptance. This acceptance supported with consideration, legal intention and capacity
makes a contractual relationship amid such parties. ( Moles 1998)
The parties to the contract are obligated to comply with the terms of the contract in order to avoid any
kind of consequences. One of the most promising terms which are made part of the contract by the
parties in order to limit or exclude the liabilities is an exclusion term.
Exclusion terms are those terms that are incorporated by the contract parties to limit or exclude an
obligation of one of the party to the contract that might arise because of the occurrence of some uncertain
event that is anticipated by the parties.
The exclusion terms are normally found upon the tickets and thus a specific analysis is done on the
applicability and legality of exclusion terms of made part on the tickets.
In ticket cases, terms are normally made part of the ticket which is applicable upon the recipient of the
ticket. Exclusion terms are also made part of the tickets which limits the liability of the issuer of the
ticket on the incurrence of any predetermined event mentioned on the ticket itself.
Normally the terms which are made part of the ticket are enforceable upon the holder of the ticket
irrespective of the fact whether the terms are read by the recipient or not? However, as per Parker v.The
South Eastern Railway Co (1877), the courts consider the exclusion terms made part of the tickets valid
on certain basis: ((Heffey et.al 1998)
i. If the exclusion term made part of the tickets is within the knowledge of the receipt then he is
bound by the same otherwise not
ii. If the terms that are made part of the ticket are those which can be reasonably anticipated by a
normal prudent man, then, such terms are binding irrespective of the fact whether the
recipient is in the knowledge of the term or not.
iii. The courts do not consider the exclusion term made part of the tickets as unfair but considers
that the terms should not be very stringent;

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iv. If a term is made part of the ticket which is not usual, then the issuer must make every
reasonable effort to bring the exclusion term in the notice of the receipting and is held in
Interfoto Picture Library Ltd v. Stiletto Visual Programmes Ltd [1989];
v. In Henderson & others V Stevenson 1875 and J Spurling Ltd v Bradshaw [1956] it was held
that the terms if are not reasonable so as to be determined by normal prudent man then
reasonable efforts are to be made to bring the same in the notice of the recipient.
vi. In Richardson, Spence & Co v Rowntree [1894] and Thompson v London, Midland and
Scottish Railway Co Ltd [1930] , the court held that of the plaintiff is illetrate or is not
capable to understand the terms then it is necessary that the terms must be communicated.
vii. The liability in case of negligence can be excluded but the same must be made part of the
exclusion clause specifically.
viii. Also, the terms must be communicated before the formation of any contractual relationship
and is held in Thornton V Shoe Lane Parking Ltd 1971.
The law is now applied.
Application
As per the facts,
Mandrake was a magician who along with his assistant was on a tour. He left four suitcases at the parcels
office which contains items used in ‘escape illusion’. Mandrake paid $5 for each suitcase deposited and
received a ticket for each one. He also submitted that he will sent instruction for the dispatch. The
assistant without any instruction and tickets persuaded the clerks of the office to let him open the
suitcases. The assistant took several items and was later convicted of larceny.
Mandrake sued the company for damages, but the company relied on an exclusion clause that was made
part of the ticket. According to the clause the company was not liable for any loss, damage or misdeliver
to any articles provided the value of the items was in excess of $10 unless at the time of the deposit of
the article an extra charge was paid’. However, no such declaration was made.
Now, generally as per Parker v. The South Eastern Railway Co (1877) if an exclusion term is made part
of the ticket then the term is valid irrespective of the fact whether the same is read by the recipient or not.
Thus, Mandrake must be bound by the term.
However, as per Interfoto Picture Library Ltd v. Stiletto Visual Programmes Ltd [1989] if an unusual
term is made part of the receipt then the defendant must make extra efforts to bring the term in the notice