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Courts Will Generally Uphold an Exclusion Clause

Info: 2527 words (10 pages) Essay
Published: 6th Aug 2019

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Jurisdiction / Tag(s): UK Law

In considering the facts as they are provided herein pertaining to Daniel’s claim for damages for the negligence of Eddie and/or Shawn, exclusion clauses are contract terms that attempt to exclude or limit liability for what would otherwise be a breach of contract as in this case regarding the injuries that Daniel suffered whilst in Eddie’s auto mechanic premises learning about how to more effectively pump up his car’s tyres from Shawn (one of Eddie’s employees). For example, it is not uncommon for venues like a car mechanics to allow customers to leave personal belongings either in a secure area or with members of staff and so, as a result, there will often be an attempt to exclude liability for the loss or damage to these belongings by displaying signs to this effect which would seem successful regarding the loss of Daniel’s property. In this specific case it was stated on a small sign at the auto mechanic’s shop that “The management hereby gives notice that no liability is accepted for any loss of customers possessions. Further, no liability is accepted for any injuries sustained through any services provided on these premises”.

On this basis, it is to be appreciated that the courts will generally uphold an exclusion clause if it is one of the terms of the contract. This is because it has been ‘incorporated’ therein, that the wording covers what has happened and it meets the requirements of the Unfair Contract Terms Act (UCTA) 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 even if the party the exclusion clause has been held against has not read the document where it is signed and the other party knows this (L’Estrange v. Graucob Ltd). In this case, however, there is a need to recognise that since the exclusion clause is provided on a little sign it is an unsigned contract so that notice must be provided either prior to or when the the contract is formed to someone like Daniel because of the size of the sign that is so small detailing the exclusion clause (Olley v. Marlborough Court Hotel).

There is also a need to appreciate many draconian exclusion clauses have been upheld as good law in practice (SAM Business Systems v. Hedley & Co) despite the fact that no general principle has arisen that serves to permit contractual terms that are apparently considered agreeable by parties to a contract merely because of the fact that they are looked upon as being ‘unfair’ (Mitsubishi Corp v. Eastwind Transport Ltd). Then, with regard to the specific wording of the exclusion clause itself, if the wording of the clause is unclear, it is effectively interpreted against the party who wants to rely upon it. With this in mind, someone like Eddie cannot exclude his business’ liability for negligence unless clear words are used making it plain that, even if there is any negligence in the course of the service they are providing, they are denying liability (Hollier v. Rambler Motors (AMC) Ltd). At the same time, however, the terms of the UCTA 1977 may apply to business liability (i.e. the person or company who wants to rely on the clause is a business) with a business defined as those organisations who are seeking to make a profit and includes the professions and the activities of local and public authorities under section 14. It is also to be appreciated, in view of the extent of Daniel’s injuries, that it is not possible for a business to exclude liability for death and personal injury that caused by those working for the business’ negligence like Shawn failing to provide effective supervision under section 2(1) of the UCTA 1977. Moreover, in relation to Daniel’s injuries whilst at the auto mechanic’s, the Occupiers’ Liability Acts of 1957 and 1984 have served to provide that, by way of illustration, someone like Eddie who owns the auto mechanic’s that has patrons into the workshop owes a minimum duty of care for people’s safety (see also Cooke v. Midland Great Western Railway of Ireland).

The exercise of the tort of negligence as in Daniel’s case is ostensibly based upon recognising that there is a a duty of care that is considered owing by an individual to someone else then being subject to a breach as a result of there being failure to act with sufficient care and skill. As a result, to Lord Wright in Lochgelly Iron & Coal v. M’Mullan, “negligence means more than heedless or careless conduct … it properly connotes the complex concept of duty, breach and damage thereby suffered by the person on whom the duty was owing”. However, the key decision is Donoghue v. Stevenson involving the consumption of a drink containing part of a decomposed snail in a public bar that neither her friend, who bought the drink for her, nor the shopkeeper who sold it were aware of because of the bottle’s opaqueness and so the manufacturer was sued for negligence and the House of Lords agreed there was a valid claim. Therefore, a successful negligence claim involves – (a) a duty of care; (b) with a breach of that duty; (c) that was proximate and not too remote; (d) leading to recognised harm in fact.

It is also to be appreciated that a duty of care being recognised in practice connotes there being an obligation legally in place with regard to an individual adhering to a reasonable standard of care to avoid any foreseeable harm occurring to others. Therefore, a plaintiff like Daniel needs to recognise what a duty of care actually is that is put into place under the law that the defendant (Eddie/Shawn) has served to breach leading to a claim in negligence an incurring of liability – i.e. in this case for failing to provide effective supervision. This is because it is considered to be impossible for there to be liability without a claimant like Daniel first establishing they were owed a duty of care by the defendants (i.e. Eddie and/or Shawn) that was breached because the defendants’ conduct had fallen short of either a general standard or a ‘special standard’ or care and even what is expected of a ‘reasonable person’ in the circumstances of a given case.

Any defendant including Eddie and/or Shawn generally need to meet the standard of care that is considered to be appropriate in the circumstances for a a ‘reasonable man’ as is defined under the common law via the decisions of the courts (Blyth v. Birmingham Waterworks) despite the fact that there have been various definitions provided in this regard by the members of the judiciary through the decisions of the courts (McFarlane v. Tayside Health Board). What is considered to be a ‘reasonable man’ is based upon the fact the level of objectivity in such cases is founded upon what is possible to expect of in the circumstances of defendants like Shawn and Eddie on the same facts as in this case since it is only possible to expect reasonable care in the exercising of their work. But anyone like a mechanic or the owner of a business who mark themselves as having a certain expertise because of the activities that they undertake so that they need to be compared with what other similar ‘reasonable professionals’ would have done in the same circumstaces (Bolam v. Friern Hospital Management Committee).

For the courts to determine what a ‘reasonable person’ must do there is a need to consider the following factors. First, there is a need to consider what the defendants Eddie and Shawn knew. For example, in Roe v. Minister of Health it was recognised a defendant would only be deemed liable in the event that a ‘reasonable person’ could have foreseen the loss or damage – although the ‘eggshell skull’ rule recognises victims of harm should be taken as they are found (Smith v. Leech Brain & Co.). Moreover, there is a need to show an understanding of what the degree of risk was in the sense that the more risks there are, the more precautions will be required (Bolton v. Stone). In addition, it is also necessary to consider how practical the precautions were that were taken in the form of the notice sign with the exclusion clause provided (Wilson v. Governor of Sacred Heart Roman Catholic Primary School). It is also to be appreciated that when any actions of a defendant are deemed to fulfil a purpose considered to be social then they may be justified taking more risks in the future (Watt v. Hertfordshire County Council – see also section 1 of the Compensation Act 2006) and, where a defendant complies with a common practice, a defendant will have met a reasonable standard, unless the practice is considered negligent by the court (Paris v. Stepney Borough Council).

The concept of proximity in seeking to bring about a claim for negligence involves considering whether the event that has transpired in a given case such as this is related sufficiently to an injury that is legally recognisable (i.e. Shawn’s negligence in failing to supervise Daniel when he was learning about pumping up the tyre on his car led to his injuries when the tyre then exploded) to be its cause regarding causation regarding cause-in-fact and proximate cause (Yorkshire Dale Steamship Co v. Minister of War Transport). In addition, loss or injury sustained must not be too remote to guarantee liability is placed with the right defendant since Eddie is the business owner and the employer and Shawn is an employee as part of the business (see, for example, the decisions in Lamb v. London Borough of Camden & Jolley v. Sutton London Borough Council). Moreover, there is also a need to appreciate that the Factual (‘But for’) Test of Causation centres on the idea a defendant like Eddie and/or Shawn will only be liable where Daniel’s injuries would not have arisen without Eddie and/or Shawn having been negligent. However, a particular defendant may not have been considered to be liable if the damage would, or could, have happened anyway in the circumstances (Christopher Andrews v. Barnett Waddingham LLP & Raj Waddingham).

As to whether there is recognised harm in fact (‘Causation’) for a claim in negligence primarily relates to causation in the context of the ‘causal relationship between conduct and result’ to connect conduct with the harm that resulted in the circumstances (see, for example, the decisions in R v. Malcherek and R v. Cheshire). The recognition of this connection is undertaken with a view to produce results that are both just and fair in their nature reflected in negligence with the stages necessary for this offence (The Wagon Mound (No 1)). However, whilst a chain of causation may not always be found in every case, a defendant like Eddie or Shawn ought to be liable for a claimant like Daniel’s injuries on the facts as they stand(Sindell v. Abbott Laboratories). Then, in looking to consider whether a claimant like Daniel could claim compensation for the economic loss that they accrued (i.e. any loss of earnings during the course of Daniel’s employment), the policy of the courts is to disallow ‘pure economic loss’ claims.

Therefore, if the loss is connected to injury to the claimant’s physical ‘person’ and so, even if the loss that is accrued by Daniel is financial in the circumstances of a case such as this (i.e. loss of earnings in the event that Daniel has a job and is out of work as a result of his injuries), it is not pure economic loss and is considered to be possible to recover (S.C.M Ltd v. W.J. Whittall). However, there is also a need to appreciate that, as a common law defence, the concept of contributory negligence relates to the idea someone like Daniel could be deemed careless with a view to safeguarding their own safety where they fail to act with what is considered to sufficient care and attention. This is because it is arguable that, in pumping up his car tyre, even though he was not a car mechanic himself, Daniel should have been able to recognise when the tyre was becoming overly pumped up before it exploded injuring himself. A contributory negligence defence has arguably been established because Daniel failed to look to effectively take care of themselves and thus arguably contributed to his own injuries (Nance v. British Columbia Elwy). But, clearly, there are limits to this rule of tort that are aptly illustrated by the decision in Tremayne v. Hill where the court considered that there was not any duty actually in place upon a pedestrian to keep a lookout when they are crossing a multiple road junction.

Finally, in considering how Eddie may be held liable for Daniel’s injuries caused as a result of Shawn’s negligence, the matter of vicarious liability is a strict, secondary liability under the common law in the UK derived from the decisions of the courts. Ostensibly, vicarious liability is based on the argument that someone in a position of seniority may be held to be responsible via the agency relationship for the actions of a subordinate under domestic law (Meridian Global Funds Management Asia Limited v. Securities Commission). However, as a common law defence, contributory negligence under the Law Reform (Contributory Negligence) Act 1945 means Shawn may be considered careless for letting Daniel pump up his tyres unsupervised (Lister v. Helsey Hall Ltd). The need for recognising the potential vicarious liability of those in senior positions like Eddie has become particularly relevant in cases involving the liability of companies because they can only be seen to act through their subordinates under domestic law as it stands (Lloyd v. Grace, Smith & Co.). Therefore, it is to be appreciated that liability can still be attributed to Eddie because of Shawn’s negligence with regard to this case involving Daniel leading to claims for compensation by way of damages for the injuries that Daniel accrued as a result of the tyre on his care exploding (Meridian Global Funds Management Asia Limited v. Securities Commission).

On this basis, it would seem that the exclusion clause at the car mechanic’s would only be viable with regard to the loss of Daniel’s property and not his injuries because of the fact that it is not possible exclude the possibility of physical injuries occurring. This would seem to mean that there is the potential for a successful claim for negligence by Daniel against Eddie and/or Shawn because a duty of care was breached and it would seem that the chain of causation between the event that led to Daniel’s injuries and the injuries themselves would seem to be intact and sufficiently proximate – although there may be an element of contributory negligence for the reasons already stated. At the same time, however, it is to be appreciated that an element of vicarious liability may also apply since Shawn is one of Eddie’s subordinates at the car mechanic’s and thus, as his employer, Eddie should be held to account for Daniels injuries and losses in damages.

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