98 Chapter 3The terms of the contract
Because of the unfairness of such cases, Parliament felt the necessity to intervene. In 1977 it
passed the Unfair Contract Terms Act (UCTA 1977). We shall examine UCTA 1977 later in
this chapter. When faced with an exclusion clause, however, the first step is to consider
whether the exclusion clause was a term of the contract. If the clause was not a term of the
contract, then it would not have any effect anyway, and it would not be necessary to con-
sider the Act.the contract? Is the exclusion clause a term of
It is always necessary when considering the effect of an exclusion clause in a contract to first
decide whether or not the clause was a term of the contract. As we saw in L’Estrange v
Graucob, a person who signs a document will be bound by its contents. Written, signed
documents therefore present little difficulty in deciding whether or not an exclusion clause
was a term of the contract. However, a person who misrepresents the effect of an exclusion
clause may not be able to rely on it, even if the other party does sign the document which
contains the clause. An example can be seen in Curtis vChemical Cleaning and Dyeing Co
Ltd (1951), in which a customer who took her wedding dress to a dry cleaners was asked to
sign a ‘receipt’. The customer asked what it said and was told that it just covered liability
for damage to beads and sequins. She signed the document, which in fact excluded all
liability on the part of the dry cleaners. The wedding dress was badly stained and the dry
cleaners tried to rely on their exclusion clause. The Court of Appeal held that they could not
do so because they had misrepresented the effect of the clause.
If an exclusion clause is contained in a document, such as a train ticket, which the reason-
able person would think was a part of the contract then the term will be binding. If the
clause was contained in a document, such as a receipt, which the reasonable person would
not think contained the terms of the contract then the clause will not be binding. Sometimes
what the reasonable person would have thought is obvious enough. In other cases it can be
very hard to tell.This case must be contrasted with Thompson vLondon, Midland and Scottish Railway Co
(1930), in which the Court of Appeal held that a train passenger who could not read was
bound by an exclusion clause in the railway’s timetables. The ticket was for a cheap excur-
sion, and was said to be available subject to the company’s timetable and regulations. The
timetable was not free but was available to be purchased. It contained an exclusion clause.
It was held that the passenger had been given reasonable notice of the exclusion clause.Chapelton vBarry UDC (1940) (Court of Appeal)The claimant hired a deck chair for 2d (1p). When he sat in the chair it collapsed and he
was injured. The hirers of the chair relied on an exclusion clause, which said that they were
not liable for any accident or damage resulting from the hire of the deck chair. This clause
had been printed on a slip of paper which the attendant issued to hirers of the chairs. It was
possible to sit on a chair for an hour or two before the attendant took the money and issued
the slip.
HeldThe clause was not a part of the contract because it was contained in a mere receipt.
The reasonable person would not have expected the terms of the contract to be contained
in such a receipt.