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Can Liability be Escaped?
Page 38
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Courts Construe in the Narrowest Terms Clauses by in Contracts Seeking . to Limit Liability for Our Legal Damages : Important New Decision on Hiring Adviser EVERYONE has encountered those sinister words, whether on a written contract, receipt, or bill head, . "everything at owner's risk," or "no liability for any injury or damage caused through any defects." These are merely examples of the common spectacle of a man trying to place himself outside the grip of a• liability that would otherwise attach to certain of his acts or omissions towards those with whom he does business.
Nearly all laymen know of this dodge of selfprotection, but as in most legal questions, it is a case of a little knowledge often being a dangerous—or at least a misleading—thing. Even lawyers can go sadly astray when drafting documents which contain such a " contracting-out " clause, and the chief reason why meticulous care is necessary in drafting phraseology is not far to seek.
The courts of this country have always looked, if not askance, at least with the greatest circumspection, at all attempts to avoid the normal legal consequences of certain eventualities. Whilst recognizing that free men may freely contract about their business dealings, as may seem best to them, the courts have always made it clear that such clauses in agreements will be most strictly construed and given their narrowest, rather than their broadest, interpretations.
Clear Definition Essential
It has been said time and again in the Court of Appeal that if a man seeks to limit his liabilities in this way, it is necessary that the extent of the limitation should be stated in the clearest and most unequivocal terms. In other words, such an exempting or limiting clause will always be construed against the party putting it forward when liability is in question.
For such a condition to have any effect on a contract, it must be proved to have formed part of the contract itself and to have been agreed to by the other party after it had been sufficiently brought to his notice. For instance, it is of no use for a garage owner to agree to store a vehicle and mention no special conditions of acceptance, and then to seek to rely upon a statement disclaiming liability for damage printed on a parking :icket stuck to the windscreen as, or after, the driver a .eaves. Such a purported condition is not a part of the contract, which was complete before the condition was brought to the customer's notice.
Likewise, the " ticket " cases, as they are known in law, have laid doWn that where a document, such as a ticket, changes hands at the time of the contract, it is a question of whether it is part of the contract or a mere receipt for payment. If it is the former and there are conditions printed on it, the question arises whether the person seeking to rely on them had reasonably brought them to the other person's notice. Thus, such conditions printed on the reverse of a ticket have been held invalid in the absence of a notice on the front directing attention to the back.
All this leads up to the recent interesting case of White v. John Warrick and Co., Ltd., where, although the subject-matter of the contract was nothing heavier than carrier tricycles, the principles involved are applic a4 able to every similar contract of hiring in particular, and most other species of contract in general.
The plaintiff agreed to hire from the defendants a carrier tricycle for delivery of his newspapers. This arrangement was embodied in a written contract, which took the form of a printed document used by the defendants. By a clause in the contract it was stated: "Nothing in this agreement shall render the owners liable for any personal injuries to the riders of the machines hired nor for any third-party claims, nor loss of any goods, belonging to the hirer, in the machines." Subsequently, the plaintiff was injured through the saddle collapsing and when he claimed damages the defendants sought to rely on this clause.
It was conceded by the plaintiff's counsel, and held by the Court of Appeal, that the effect of the clause was clearly to prevent the plaintiff being able successfully to found a claim for damages based on his Contractual relationship with the defendants. However, that was not necessarily the end of the matter. The plaintiff had claimed damages for his injury both under the contract and on the grounds of ordinary negligence. Although he failed in the former case, the Court, of Appeal held that there was no reason why he could not succeed in negligence (assuming he could prove there had been negligence, which question would have to be separately investigated), and that the words in the exempting clause were not effective as regards a claim
framed in that way. •
The reason for this possible " duality of liability " and what it means are best shown by a simple example. When you go to the railway station and buy a ticket, the railway is under an implied liability under the con
tract to carry you safely from A to B. If it fails to do so, it is liable in damages for having failed to perform its part of the contract.
Liability for Negligence
A contractual obligation is absolute and independent of negligence, and cannot be evaded except by a proper exempting clause in the contract. However, in addition to its responsibility under the contract, the railway may also be liable for a breach of its general duty to take care—in other words, for negligence. This liability arises only if negligence is proved, so that it is not such a " strict " liability as that under a contract.
The clause in the contract in White's case, therefore, was interpreted as being referable only to the defendant's possible liability under the contract and not to be sufficient to exclude any liability for negligence. The Court of Appeal applied the principles set out earlier in this article, as well as the principle that where there are two possible heads of liability on a defendant, one for negligence and the other for a strict (in this case, a contractual) liability, an exemption clause will be construed, so far as possible, as exempting him only from the strict liability, and not from the lesser liability of negligence.
The moral has been pointed before and is to be found in one of the legal principles mentioned. A provision to limit liability must be made in the clearest language and freely agreed by the other party to the contract.