Principles of Business Governance

Running head: PRINCIPLES OF BUSINESS GOVERNANCE
PRINCIPLES OF BUSINESS GOVERNANCE
Name of Student
Name of University
Author Note

PRINCIPLES OF BUSINESS GOVERNANCE1
Question 2A
Issue
The main issue in the case is whether Yvonne can be successful in claiming for the
loss of her personal valuables worth $3,000.
Law
An exemption clause under the common law of contract can be described as a specific
term that has been mentioned in the contract that would either exclude or limit the liabilities
of one of the parties to the contract as has been discussed in the case Darlington Futures Ltd
v Delco Australia Pty Ltd1.
As discussed in the case Parker v SE Railway2 the general rule for the incorporation
of an exclusion clause is that the person who is relying on the clause is required to be taking
necessary steps for drawing the attention of the other party to contract to the clause.
Application
Applying the judgment of the case Darlington v Delco3in the given scenario it can be
seen that on the back of the ticket of the Western Rail cloakroom there had been an exclusion
clause that mentioned that the railway would not be liable for any package that exceeds the
value of $50.
Applying the judgment of the case Parker v SE Railway4 it can be observed that the
Western Railway had necessary steps to make its customers aware of the exclusion clause,
like putting a sign above the counter and over the ticket for looking at the back of the ticket
1 Darlington Futures Ltd v Delco Australia Pty Ltd [1986] 161 CLR 500
2 Parker v SE Railway (1877) 4 CPD 416
3 Darlington Futures Ltd v Delco Australia Pty Ltd [1986] 161 CLR 500
4Parker v SE Railway (1877) 4 CPD 416

PRINCIPLES OF BUSINESS GOVERNANCE2
for the conditions. Not checking the conditions was negligence on Yvonne’s part and hence
she will be bound by the exclusion clause. She would not be able to claim the full loss of
$3000 but only the loss of up to $50 could be claimed by her from Western Railway.
Conclusion
From the above discussion it can be concluded that Yvonne would not be successful
in claiming her loss of $3000.
B.
Issue
The issue in the given scenario is whether Yvonne would be successful for her claim
if her bag was allowed by Western railway to a third party without any ticket.
Law
As stated in the ‘four corner rule’ discussed in the case Sydney City Council v West5
an exclusion clause would not be applicable towards any action that is outside the scope of
the contract.
Application
By applying the ‘four corner rule’ mentioned in the case of Sydney City Council6 if
Western Railways allowed any third party to be claiming Yvonne’s bag and its contents
without the production of ticket then the exclusion clause would not be applicable and the
railway would be liable for negligence towards its customers.
5 Sydney City Council v West [1965] HCA 68
6 Ibid