82 5: Content of contracts Part B The law of obligations
Hollier v Rambler Motors 1972
The facts: On three or four occasions over a period of five years the claimant had had repairs done at a
garage. On each occasion he had signed a form by which the garage disclaimed liability for damage
caused by fire to customers' cars. The car was damaged by fire caused by negligence of garage
employees. The garage contended that the disclaimer had by course of dealing become an established
term of any contract made between them and the claimant.
Decision: The garage was liable. There was no evidence to show that the claimant knew of and agreed to
the condition as a continuing term of his contracts with the garage.4.1.4 Onerous terms
Where a term is particularly unusual and onerous it should be highlighted (although it is doubtful
whether this applies to signed contracts). Failure to do so may mean that it does not become incorporated
into the contract.Interfoto Picture Library Ltd v Stiletto Visual Programmes Ltd 1988
The facts: 47 photographic transparencies were delivered to the defendant together with a delivery note
with conditions on the back. Included in small type was a clause stating that for every day late each
transparency was held a 'holding fee' of £5 plus VAT would be charged. They were returned 14 days late.
The claimants sued for the full amount.
Decision: The term was onerous and had not been sufficiently brought to the attention of the defendant.
The court reduced the fee to one tenth of the contractual figure to reflect more fairly the loss caused to the
claimants by the delay.4.2 Interpretation of exclusion clauses
In deciding what an exclusion clause means, the courts interpret any ambiguity against the person who
relies on the exclusion. This is known as the contra proferentem rule. Liability can only be excluded or
restricted by clear words.
In the Hollier case the court decided that as a matter of interpretation the disclaimer of liability could be
interpreted to apply:
Only to accidental fire damage or
To fire damage caused in any way including negligence.
It should therefore be interpreted against the garage in the narrower sense of (a) so that it did not give
exemption from fire damage due to negligence. If a person wishes successfully to exclude or limit liability
for loss caused by negligence the courts require that the word 'negligence', or an accepted synonym for
it, should be included in the clause.Alderslade v Hendon Laundry 1945
The facts: The conditions of contracts made by a laundry with its customers excluded liability for loss of or
damage to customers' clothing in the possession of the laundry. By its negligence the laundry lost the
claimant's handkerchief.
Decision: The exclusion clause would have no meaning unless it covered loss or damage due to
negligence. It did therefore cover loss by negligence.4.2.1 The 'main purpose' rule
When construing an exclusion clause the court will also consider the main purpose rule. By this, the court
presumes that the clause was not intended to prevent the main purpose of the contract.