Business Law: Analyzing Exclusion Clauses and Contractual Terms

This case study analyzes a legal dispute concerning the applicability of an exclusion clause in a contract between the government of Happyvale and Medic Transports regarding the transportation and storage of swine flu vaccines. The core issue revolves around whether Medic Transports can be exempted from liability for vaccine damage caused by improper storage temperatures, given the exclusion clause included in a form titled "application for credit" signed by the Minister of Health. The analysis involves examining legal rules pertaining to exclusion clauses, including requirements for proper inclusion in the contract, absence of misrepresentation, and clarity of terms, referencing relevant case law such as Thornton v Shoe Lane Parking Ltd, Curtis v Chemical Cleaning, and Andrews Bros Ltd v Singer Cars. The decision argues that since the contract stipulated that all terms should be read before signing and the clause wasn't illegal, the government's arguments are not acceptable, favoring the company's reliance on the exclusion clause. Desklib provides access to similar solved assignments and resources for students.

Running head: BUSINESS LAW
BUSINESS LAW
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Arguments:
The subject matter of the case is based on the provisions of the exclusionary clause and
vitiating factors of a valid contract. In this present case, it has been observed that certain vaccine
for swine flu has been delivered to the government of Happyyvale. The government has been
entered into certain contract and it has been observed that certain terms have been included in the
contractual agreement. Further, it has been observed that certain form has been handed over to
the government with the headline “application for credit” and there are certain provisions for
exclusionary clause. According to the clause, the delivering company will not be held liable for
any damage of the vaccine. Considering the case, it has been observed that the vaccine was
damaged due to improper storing temperature and on claim for the compensation; the company
has relied on the provisions of the exclusion clause. The government has argued that the
company has made no such indication regarding the exclusionary clause of the contract, as it is
included under the “application for credit”.
Legal rules:
There are certain rules regarding the exclusion clause and in this argument, it is to be
determined whether all the provisions have been maintained and whether the company can get
the facilities of the exclusion clause. According to the general rule, exclusion clause helps to
exclude any party to the contract from any contractual liability. There are certain essentials of an
exclusion clause such as the terms of the clause should be included under the contract and the
nature of the terms should not be contrary to the law. In Thornton v Shoe Lane Parking Ltd
(1971) 1 All ER 686, it has been held that the exclusion terms of the contract should be included
during the signing of the contract and the parties to the contract should have to mention about the

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terms to other party. Further, in Curtis v Chemical Cleaning [1951] 1 KB 805, it has been
mentioned that if any misrepresentation has been done regarding the clauses, it will not be
effective. In Andrews Bros Ltd v Singer Cars [1934] 1 KB 17, it has been observed that if any
ambiguity is there in the clause, the court will pronounce judgment against the party rely on the
clause. However, in case of adverse situation, the terms will be valid.
Decision:
In this case, the company has taken the view that it was mentioned that the contract
should be signed after reading all the terms; but the government has made no certain steps.
However, the government has taken the view that the condition of the contract based on the
credit terms. It is to be stated that when it has been clearly mentioned that the contract should be
signed after considering all the terms, it should have to read it first. Further, this clause has been
included during the time of contract and none of the terms is illegal. Therefore, the arguments
made by the government are not acceptable.

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Reference:
Andrews Bros Ltd v Singer Cars [1934] 1 KB 17
Curtis v Chemical Cleaning [1951] 1 KB 805
Thornton v Shoe Lane Parking Ltd (1971) 1 All ER 686