Exclusion clauses
Exclusion clauses

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Exclusion clauses

2.2.1 Timing

When determining whether reasonable notice of a term has been given, the timing of the notice is very important. The exclusion clause must be brought to the attention of the other party before the contract is made. This is demonstrated by Chapelton and also Olley v Marlborough Court Ltd [1949] 1 KB 532.

Box 4 Olley v Marlborough Court Ltd [1949] 1 KB 532

Mrs Olley and her husband arrived for a week’s stay at the Marlborough Court Hotel. They paid for the room at reception then went up to their room. A sign on the back of the bedroom door stated, ‘The proprietors will not hold themselves responsible for articles lost or stolen, unless handed to the manageress for safe custody …’. During their time at the hotel, Mrs Olley had furs, jewellery, clothes and a hatbox stolen from her room. She claimed the value of these from the company which owned the hotel. The company argued (among other points) that the sign on the bedroom door excluded their liability for the theft.

In the Court of Appeal, Lord Justice Denning stated (at p. 549):

The first question is whether that notice formed part of the contract. Now people who rely on a contract to exempt themselves from their common law liability must prove that contract strictly … The best way of proving it is by a written document signed by the party to be bound. Another way is by handing him before or at the time of the contract a written notice specifying its terms and making it clear to him that the contract is on those terms. A prominent public notice which is plain for him to see when he makes the contract or an express oral stipulation would, no doubt, have the same effect. But nothing short of one of these three ways will suffice.

As Mrs Olley would only have seen the notice after she had entered into a contract with the hotel, it was held not to form part of the contract. In any event, it was found not to be clear enough to exclude the company’s liability for negligence. Therefore, the company’s appeal was dismissed.

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