Exclusion Clause and Unconscionable Conduct in Business Law

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Business Law

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Part A
I: Issue
The key issue is whether Smith’s Parking is likely to succeed to rely on the
exemption clause and protect itself from any legal action taken by Jones.
R: Rule
The parties who form a contractual relationship between each other are bound
by the terms of the contract. The contractual parties can legally enforce each other to
comply with the terms. In case these terms of the contract are breached, then the
aggrieved parties have the right to demand compensation from the breaching party.
Thus, a liability can be imposed on the contractual parties in case they did not comply
with the terms of the contract. However, the parties have the right to exempt
themselves from the liability which they face for breaching the contractual terms by
relying on the exclusion clause (Gibson, 2017). The parties of a contract can include
the exclusion clause into the contract which allows them to eliminate their liability
arise in case the contractual terms are breached. The objective of including exclusion
clause in a contract by a party is to exclude their liability completely or limit their
liability to a fixed sum of money. In the case of companies or businesses, exclusion
clauses are often displayed by them on the premises in the way of notice or on printed
tickets or receipts (Sekendiz, Ammon & Cannaughton, 2016). Many times parties
incorporate these clauses in the contract while entering into a contractual relationship
third parties. While determining whether the exclusion clause is valid or not, the court
enquiries upon the circumstances in which those terms become a part of the contract.
The general rule of incorporation of an exclusion clause in the contractual
terms provides that the term must be brought into the attention of the contracting party
while the contract is being formed or before its incorporation. In this context, a
relevant judgement was given by the court in the case of Olley v Marlborough Court
[1949] 1 KB 532. In this case, a hotel room was booked by the claimant who signed a
contract on the reception desk of the hotel. Later when she when into her room, a

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notice was mentioned behind customers’ hotel room to exclude the liability of the
hotel if their belongings are damaged or stolen. It was held by the court that this notice
is not valid based on which the liability of the hotel cannot be removed because it was
not incorporated while complying with the general rule (Stone, 2013). It was not
brought into the attention of the claimant when she signed in the contract at the
reception desk or before signing the contract. It is important that reasonable steps are
taken by the party to being the exclusion clause in the attention of another party while
the contract is formed or before its formation.
In the case exclusion clause is written on a ticket, then the circumstances of the
case are evaluated by the court to determine whether it is valid or not. A relevant
judgement was given in Causer v Browne [1952] VLR 1 in relation to ticket or receipt
containing terms. In this case, the court provided that it is important to determine
would a reasonable person assumes that the ticket is a part of the contract or whether it
is a mere receipt, acknowledgement of voucher and not a contractual document at all
(Graw, 2012). Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163 is another relevant
case in this context. In this case, the claimant has issued a ticket by putting money in a
parking machine while he was entering into the car parking. In small print, it was
mentioned on the ticket that there are certain terms and conditions which are binding
on customers and they are mentioned inside the parking. The terms stated an exclusion
clause which provided that the parking will not be held liable in case the customers
were injured. Due to the negligence of the defendant, an injury was suffered by the
claimant. A suit was instituted by the claimant, and a question was raised whether the
terms were mentioned while the contract was formed between the parties (Monaghan
& Monaghan, 2013). The court provided that the claimant gave his acceptance by
putting his money in the machine and the ticket was given after the acceptance took
place; thus, the exclusion clause was not incorporated in the contract, and the
defendant cannot rely on its defence.
A: Application
In the given case study, Jones was injured when she comes back into the car
parking to get her car. A notice was written outside the parking which stated that the