LAWS2203 Corporations Law

Issue

The main issue that stems out, in this case, is to check the available damages that Bronwyn can claim from Purdy.

Rule

An exclusion clause is a provision of a contract that absolves one of the contractual parties liability in circumstances covered under the clause. Depending on the contractual terms, the term used throughout the contract may be both lawful and unlawful. Before entering any document with such terms, it is important to become acquainted with them and, ultimately, to contest them. Even where an exclusion provision is read solely against the group relying on it, close analysis of the clause in question is always needed to determine if it protects the violation in question (Andrews, 2015). Where the parties have expressly combined a provision in their contract, it is the court's responsibility to grant that clause a viable impact so as not to read that clause in such a manner that one of the parties is deprived of some fair redress for its claims.

There are various ways in which a party can include the exclusion clause in a contract. These include by signature, by notice, and by course of dealing. An exclusion provision can be inserted into an unsigned contract, and thereby become obligatory, if the other side provided fair warning of its presence to the party against which it is to operate (Cartwright, 2016). The courts would consider notice period to have been provided under the following circumstances: whether the party against whom the provision exists had direct knowledge of the clauses at the time when the contract was entered between the party or if the party has prior notice about the incorporation of such exclusion clause by the other party, no matter whether he read it or not.  

In L’Estrange v Graucob [1934] 2 KB 394, The Court of Appeal found in support of the claimant, ruling that the contract's express conditions were binding and thereby ruling down contractual distribution clauses. Furthermore, the fact that the claimant was unable to properly read the contract did not diminish its worth because she decided to be bound by its conditions by signing it. This case, in particular, highlights the Court's regard for the sanctity of contract and the clause is valid even if the terms are read by the party or not.

In Olley v Marlborough Court [1949] 1 KB 532, Olley's lawsuit was valid, and she was able to recover the full expense of the stolen goods. The exclusion provision was not successfully inserted into the contract since the contract was established at reception and the note intending to preclude responsibility was not clear until after the contract was made when the visitor reached the bedroom.

Application

Bronwyn deposited the books, chairs, and ornaments to Purdy's storage facility. Purdy maintains a "Storage Receipt" which contains the terms of deposit. He also informed Bronwyn that for accessing the storage service there is a need to sign this receipt. Because of some rush, she signed the receipt without reading the terms and conditions as printed on the receipt. Bronwyn was in such a rush that she signed the contract without ever reviewing it until they agreed to a deal. Purdy then gave Bronwyn a copy of the receipt and instructed her, "You'll need to bring this with you at the time of collecting the goods back from the storage." The circumstances are identical to those in L'Estrange v Graucob, where the court determined that even though one side failed to understand or decipher the exclusion clause without any misrepresentation by the other party, the exclusion clause is nevertheless considered valid and obligatory. Sydney had been battered by high winds for many days, and the flood had ravaged the books, lounges, and two boxes of ornaments.

Purdy refused to compensate Bronwyn for the value of the stolen books and the boxes that were stolen from the storage facility. He contended that there was an exclusion clause on the back of the receipt that was provided to Bronwyn at the time of deposit. He depended on an exclusion provision printed on the storage receipt, that claimed "They do not take any blame for the loss or destruction of any object deposited on our grounds," according to the clause. Bronwyn objected, claiming that she had never examined the receipt and it had never been called to her notice. Purdy then show Bronwyn a large sign that was hung above the front entrance in which it was written that "For full storage terms and conditions please refer to your storage receipt." According to the court decision in Olley v Marlborough Court, the notice was hanged on the entrance and it is easy for any person to read and understand it. Bronwyn had the time and opportunity to quickly interpret the terms and conditions in the receipt, and as a result, the exclusion provision became true again.

Conclusion

Based on the applicability of the rule, in this case, the exclusion clause is considered valid, as it was brought into the notice of the party and the party has also signed the receipt and thus Bronwyn will no be able to claim any damages.

References

Andrews, N., 2015. Contract law. Cambridge University Press.

Cartwright, J., 2016. Contract law: An introduction to the English law of contract for the civil lawyer. Bloomsbury Publishing.

L’Estrange v Graucob [1934] 2 KB 394

Olley v Marlborough Court [1949] 1 KB 532

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