Property Law: Effect of Exclusionary Clauses on Contractual Liability

This article discusses the issue of exclusionary clauses in property law contracts and their effect on contractual liability. It cites two relevant cases and provides an analysis of the application of the law to the given set of facts and circumstances.

Running head: PROPERTY LAW
PROPERTY LAW
Name of the Student
Name of the University
Author Note

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Issue
In this case a racehorse was wrongly advertised as belonging to a certain bloodline. The
advertisement was accepted by a particular person who was a racehorse breeder. This was first a
verbal agreement but a formal contract was drawn up. This written contract had specific
exclusionary clause which absolved the seller form any responsibility for representations made in
furtherance of the sale (Sisk 2017). This clause would thus exclude liability for the same and
would condone the misrepresented bloodline. The issue is to determine the rights of the seller in
such a case.
Rule
The applicable rules here can be set out through the judgment delivered by the courts in
two cases where the determination of the effect of exclusionary clauses have been discussed and
adjudicated upon. The first case to be referred to here is Spindrifter (pty) ltd v Lester donovan
(pty) ltd [1986] 1 All SA 384 (A) (Christie and Bradfield 2016). This case clarified that unless an
exclusionary clause was not specifically brought to the attention of the persons signing it (in
effect agreeing to be bound by it). If the same is not clearly brought to the attention of the
shareholders then the same would mean that the exclusionary clause was not adequately
incorporated into the terms of the contract. Thus the parties to the contact would not be bound by
such a determination. This principle has also been reiterated in another landmark case concerning
an appeal. This case was Mercurius Motors v Lopez (149/2007) [2008] ZASCA 22 (Diamond
2013). Here the dispute was regarding a stolen car from a car depot where the owners of the
depot had obtained a contract that contained an exclusionary clause absolving them from

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responsibility. However the same was not printed in a way that would attract the attention of the
person signing it. Thus it was held by the court that this exclusionary clause was not incorporated
into the framework of the terms of the contract. Thus the exclusionary term would not form a
part of the contract and would not bind the parties signing the same. Thus, the term would be
void.
Application
Under the given set of facts and circumstances the buyer when signing the contract did
not look into the terms specifically. This was because all the terms had already been agreed upon
in the oral agreement. This exclusionary clause added by the buyer was a variation of the original
terms and thus for it to be binding the seller would be required to bring the same to the attention
of the buyer. This has been clarified in the judgment in Spindrifter (pty) ltd v Lester donovan
(pty) ltd [1986] 1 All SA 384 (A). Thus, as a result, following the judgment in Mercurius
Motors v Lopez (149/2007) [2008] ZASCA 22, the exclusionary clause would be deemed void
(McKendrick 2014).
Conclusion
The buyer would not be bound by the exclusionary clause following the above stated
judgments and thus the clause would not be a part of the contract.

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Reference list
Journals:
Christie, R.H. and Bradfield, G., 2016. Christie's Law of Contract in South Africa. LexisNexis.
Diamond, A.S., 2013. Primitive law, past and present. Routledge.
McKendrick, E., 2014. Contract law: text, cases, and materials. Oxford University Press (UK).
Sisk, T., 2017. Democratization in South Africa: The elusive social contract (Vol. 4838).
Princeton University Press.
Cases:
Mercurius Motors v Lopez (149/2007) [2008] ZASCA 22.
Spindrifter (pty) ltd v Lester donovan (pty) ltd [1986] 1 All SA 384 (A).