Exclusion clause in contract law

Angelina and Brad's case involve incorporation of exclusion clause in contract law. This case stand for the term excluding liability must be informed to other party before that party's recognition or acceptance. It cannot only be binding when that party do not recognize the exclusion clause. Angelina and Brad's right will depend on whether they are able to prove that they know that exclusion liability clause before made a binding contract.

I would advice Angelina and Brad pursue Uxbridge Mill House Hotel act against on incorporation of exclusion liability clause in contract law. Firstly, this notice of exclusion liability clause is not part of the contract with Angelina and Brad. The exclusion liability clause must sternly prove in the contract (Alix A, 2003, Page.75). It is not only required clearly stating the exclusion liability clause, but also construct the binding legal relationship to customer (Olley v Marlborough Court Hotel [[1948] 1 All E.R. 955). However, in Chapelton v Barry Urban District Council 1940 1 KB 532 (CA), mere notice does not legally binding in contract law. In my opinion, therefore, Uxbridge Mill House Hotel put the exclusion liability clause on the inside of every bedroom door. However, it does not help Uxbridge Mill House Hotel make a contract with Angelina and Brad or other customers. Unless Uxbridge Mill House Hotel had clearly showed the notice and the customer agreed to be bound by its exclusion liability term.

Secondly, under Supply of Goods and Services Act 1982 (c. 29) of 13, implied term about care and skill, it clearly shows that the supplier will perform the service with reasonable skill and care in a contract. Angelina locked the door and handed the key into reception before leaving. However, Angelina's jewellery still had been stolen. It can show that Uxbridge Mill House Hotel did not perform the service with reasonable skill and care as the hotel required to do contractually (Olley v Marlborough Court Hotel [1949] 1 KB 532).

Furthermore, under the Unfair Contract Term Act 1977 s.2 (2), it states that damage to or loss of property due to negligence must be reasonable. They locked the door and handed the key to reception before leaving. Beside, Uxbridge Mill House Hotel has not a reasonable reason for missing jewellery.

In assumption, Angelina and Brad may not agree to be bound by that exclusion liability clause or they might notice that exclusion liability clause and hand jewellery into reception to be kept in the hotel safe to avoid this incident.

Uxbridge Mill House Hotel would argue that the notice of exclusion liability clause stated clearly in the hotel. Firstly, in Curtis v Chemical Cleaning and Dyeing Co. (1951, CA), it is useless for customers to claim that they misunderstood the effect of the clause, unless the seller helped to cause the misunderstanding. Uxbridge Mill House Hotel put the notice of exclusion liability clause on the inside of every bedroom door and Angelina and Brad notified that notice before Angelina's jewellery had been stolen. Moreover, Angelina and Brad also admitted that they saw several notices on the bedroom door in the hotel, but that they did not read. It is enough to construct that they misunderstood the exclusion liability clause and Hotel did not do anything to cause the misunderstanding.

Moreover, in Chapelton v Barry UDC (1940, CA), it clearly state that generally a clause will not be binding unless the offeror has taken reasonable step to draw it to customer's attention. As the above-mentioned, it has a reason to believe that Uxbridge Mill House Hotel had taken reasonable step to draw it to the Angelina and Brad's attention. Therefore, it would have been sufficient before Angelina's jewellery had been stolen.

The facts of the problem are not clear about the exclusion liability clause before Angelina and Brad signed a contract with Uxbridge Mill House Hotel. In Saunders v Anglia Building Society [1971], a person will not be bound by his signature if he shows that he was not negligent, he was the victim of some fraud. If Angelina and Brad had notified that before they signed the contract, the exclusion clause will result binding in contract. If not, Angelina and Brad can pursue the jewellery from Uxbridge Mill House Hotel due to its negligence, because the exclusion liability clause will not include in binding contract. Therefore, if Angelina and Brad can prove that they did not know the notice of exclusion liability clause, they can pursue the negligence of Uxbridge Mill House Hotel.

Case 2

Pracash and Kali had a contractual relationship with Uxbridge Mill House Hotel, which they assumed that they could enjoy a “Special Offer” for membership at 50% discount on the normal joining fee until 17th June. However, Uxbridge Mill House Hotel charged them twice and refused to refund of 50% of the joining fee. It is because they had joined too late and that offer had finished two days early.

Parcash and Kail, they can pursue Uxbridge Mill House Hotel to refund of 50% of the joining fee. Firstly, Uxbridge Mill House Hotel advertised the Uxbridge Mill House Hotel Fitness Centre with a “Special Offer” for membership to “tone up for summer” at 50% discount on the normal joining fee and stated that the offer would close on 17th June in local newspaper. This offer can be distinguished into a unilateral offer, which may be made to the world at large. In Carlill v Carbolic Smoke Ball CO. LTD (1893, CA, offer should offer to any customer who knows this offer before they accept the contract. Secondly, in contract law on postal rule for acceptance of an offer, according the case Household Insurance V Grant (1879, CA), it status clearly that communication of acceptance by post is effective even if a letter is a delayed in the post or fails to reach the offeror provided that is not due to the offeree's fault and the letter is followed the post rules properly which has a correct stamped and addressed. Pracash and Kail followed the post rules and post it by second class post on 12th June, which takes three working days. The post should was supposed to arrive at 15th June; however, due to delays in the postal service therefore the letter did not arrive until the 19th June. It has shown that it is not Pracash and Kali's fault. Therefore, suggested to Parcash and Kail should proved that they have know the “Special Offer” already and followed the post rules for their application form.

In the side of Uxbridge Mill House Hotel, it can argue that they are reasonable to refuse to refund 50% of the joining fee to Parcash and Kail. Firstly, Uxbridge Mill House Hotel stated that the offer would close on the 17th June. In contract law, the lapse of time for termination of offer, an offer (50% Discount) will stop to offer if not accepted within a time limit (17th June). Besides, an offer will lapse if not accepted with a reasonable time. Therefore Uxbridge Mill House Hotel had no sense to accept the offer after 17th June. Secondly, it can argue that Uxbridge Mill House Hotel did not state the actual amount(s) in an application form (contract). Under the Sales of Goods Act 1979,s 8, if no price is stated, a reasonable price (normal membership fees) is payable. Therefore Uxbridge Mill House Hotel have argument to argue that they can charge Parcash and Kail's membership fee as normal membership fee, which based on they do not ask the membership fee before they signed the contract and the “special offer” is cease to exist when the letter arrived at 19th July.

Contrast the argument between the side of Parcash and Kail and Uxbridge Mill House Hotel, they have to provide the evidence which they had noticed that advertising (Special Offer) before they signed the contract, such as they have a practice to buy the local newspaper. If not, Uxbridge Mill House Hotel maybe argued that they did not know this offer before they enjoyed the service. However, balance both arguments, it has shown that Parcash and Kail's argument are more powerful than Uxbridge Mill House Hotel; it is because the local newspaper suppose everyone who are living in the Uxbridge know. Therefore here has shown that Parcash and Kail have stronger argument to pursue Uxbridge Mill House Hotel refund 50% of membership fees.

Case 3

Customers get injury because of the rowing machine breaking; it can involve the breach of SGA 1979 or SGSA 1982 in contract law for the service or good supplier and breach of negligence or customer protection act 1987 in tort for manufacturer.

Pracash and Kali's case involve the breach of innominate term in contract law. I would advice Pracash and Kali pursue back injury to Uxbridge Mill House Hotel act against on the breach of innominate term in contract law, which breach the supply of goods and services act 1982, and I would not advice Pracash pursue any liability to Pro Fit.

Firstly, Pracash suffered the back injury can due to Uxbridge Mill House Hotel did not maintain to a high level standard of equipment. Under SAGA 1982 c.29, s13, which clearly state that the service supplier will perform the service with reasonable care and skill. Uxbridge Mill House left them to use the gym unattended and did not fully check the rowing machine.

Secondly, under unfair contract term act 1977, it states that death or personal injury due to negligence is void. Pracash suffered back injury, it means that the exclusion liability clause can void.

Thirdly, the exclusion liability clause is unfairness to customers. Under the Unfair Terms in Consumer Contracts Regulation 1999, a term is not bound when it is unfair if it fails to fulfil the requirements of good faith and this cause a significant imbalance in the parties' contractual relationship, which is prejudicial to the customer's interest. The exclusion liability clause did not protect customer for injury, or loss of, or damage to, any property. It can be deemed that it is an unfair term which causes a significant imbalance in the parties' contractual relationship.

Pro fit may be liable under CPA 1987 s 2, as importer or marker of the goods, which state that a person who suffers damage because of defects in a product caused by the carelessness of the manufacturer. Pracash suffered back injury because of defects in a rowing machine, which only eight months old, by the carelessness of the Pro Fit. In negligence liability in tort, Pro fit has owed Pracash a duty of care because the chain of rowing machine snapped when he used the machine.

Moreover, in Donoghue v Stevenson (1932, HL), under the ‘neighbour principle', manufacturers of goods owe a duty of care to the 'ultimate consumer' of the product. Pracash is an ultimate consumer of the rowing machine.

Pracash may be able to claim damage from Pro Fit for the back injury and three days loss of earning as a self-employed accountant as consequential economic loss by prove the strict negligence liability in tort (CPA 1987, s 5).

However, Pro Fit will not liable to Pracash who suffered the back injury. It is because Pro Fit had the exclusion liability clause with Uxbridge Mill House Hotel, which stated that Pro Fit can accept no liability for any defects in, or any injury caused by, the machine supplied, after the six month guarantee period. In exclusion clause, it is reasonable and balance exclusion clause to both sides.

Moreover, under the consumer protection act 1987 s 4, it stated that the defendant is liable only if the defect is present when the goods are put in circulation, if it raise later die to use or abuse by the consumer or third party, the defendant is not liable. The rowing machine sold eight months long and it had not any problem in the warranty six months period. Therefore, Pro fit will not liable to Pracash's back injury.

Furthermore, in the limits of the duty of care, it states that too much time has elapsed since the product left the defendant. Pro Fit sold the rowing machine to Uxbridge Mill House Hotel has eight months long. It is too much time had elapsed between the rowing machine leaving the Pro fit control's control and the accident. (Evan v Triplex class (1936))

To balance the both side argument, Uxbridge Mill House Hotel will liable to Pracash's back injury and compensate for his back injury and three days loss of earning as self-employed accountant. It is because Pro Fit did not have any liability to Pracash in negligence. However, Uxbridge Mill House Hotel may

Case 4

Uxbridge Mill House Hotel dismissed Dean with wrongful dismissal, which was pointed out that Dean was guilty of gross misconduct, that mini gym should never be left unattended with clients in it. However, under the employment right act (ERA) 1996 (s86), two to ten years' employment should give one week's notice for every complete year. Dean had worked at the centre for over two years but the result of wrongful dismissal is Uxbridge Mill House Hotel paid him two month's pay without notice. This situation offended the minimum notice periods of ERA, 1996 (s86) because of no notice was given to Dean.

Under the ERA 1999, it states that any employee entitles to sue for wrongful dismissal may also be entitled to bring a claim for unfair dismissal. Dean had eligibility to claim Uxbridge Mill House Hotel for unfair dismissal. Firstly, Dean has been continuously employed for at least one year. Secondly, Dean was found guilty of gross misconduct and was dismissed for Actual dismissal, which stats the employer clearly indicates an intention to dispense with the employee's services. Thirdly, Uxbridge Mill House Hotel proved the dismissal was not unfair, which pointed out Dean was found guilty of gross misconduct (ERA 1996, s 98)of offended key rules of the mini gym should never be left unattended with clients in it.

However, Uxbridge Mill House Hotel has been discovered the Unfair Dismissal in some circumstances. Firstly, under the ACAS code of Practice on Disciplinary Practice and Procedure in employment, it states that employee has the right to be accompanied at any disciplinary. Dean was invited to bring a friend or advisor to the disciplinary hearing but declined to do so. It shows that Uxbridge Mill House Hotel has not complied with that act.

Secondly, in fairness of dismissal of ERA 1996, s 90(4), it states that fairness is judged by deciding whether in all the circumstance of the case the employer acted reasonably. Dean responded that was a momentary error, which members were never left unattended for long. Undoubtedly, Dean offends the rules. However, Pracash‘s back injury was caused by the rowing machine breaking, not Dean left on Pracash. Uxbridge Mill House Hotel put all the responsibilities to Dean and dismissed him. It might construct the unfair dismissal because the guilty of gross misconduct cannot blame Dean's fault. In Thomson v Alloa Motor Co. (1983), it states that misconduct must be identical to the job that the employee was employed to do. Dean's job, which is a duty manager, is not identical to the repair the GYM equipment that Uxbridge Mill House Hotel was employed to do and the fault cannot be predictable for Dean. If the guilty of gross misconduct cannot found to a reason to dismiss Dean, this dismissal can become an unfair dismissal because it cannot prove that Uxbridge Mill House Hotel was the last resort and that Dean is a first time make an error (ERA 1996,s 90 (4)).

Therefore, Dean may be able to sue Uxbridge Mill House Hotel breach of contract and claim the remedies for unfair dismissal. Dean may have three options, such as Reinstatement (ERA 1996, s116), re-engagement order (ERA 1996, s114) and the compensation with the basic award (ERA 1996, s119). Moreover, Uxbridge Mill House Hotel dismissed Dean as the wrongful dismissal; he might be entitled to sue Uxbridge Mill House Hotel to recover ant lost earning payable during the notice period.

Bibliography / Reference List

Case reference

Olley v Marlborough Court Hotel [1948] 1 All E.R. 955

Chapelton v Barry Urban District Council 1940 1 KB 532 (CA)

Curtis v Chemical Cleaning and Dyeing Co. (1951)1 HB 805, 1 All ER 631

Chapelton V Barry UDC (1940) 1 KB 532

Saunders v Anglia Building Society [1970] 3 All ER 961

Carlill v Carbolic Smoke Ball Company [1893] 1 QB 256

HOUSEHOLD FIRE insurance v GRANT (1879) 4 Ex D 216

Donoghue v Stevenson (1932) AC 562; HL

Evan v Triplex safety class co ltd (1936) 1 All E.R. 283

Thomson v Alloa Motor Co. Ltd [1983] IRLR 403 97

Books reference

Adams, Alix. (2003), Law for business students 3rd edition, Pearson/Longman.