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Exclusion clauses 99

An exclusion clause will be effective only if it was agreed as a term of the contract, or if
reasonable notice of it was given before the contract was made. A term cannot later be put
into a contract which has already been made.

Earlier in this chapter we saw that a term can be implied into a contract because of a course
of dealing between the parties. We considered Kendall vLillico, in which the House
of Lords held that an exclusion clause was a part of an oral contract. This was because the
parties had often made similar oral contracts, and on each occasion the seller had sent a
‘sold note’ which always contained exactly the same terms. All the terms in the sold note,
including several exclusion clauses, were therefore implied into the oral contract. We also
saw that terms can be implied on the basis that they are customary in a particular trade
or industry. British Crane Hire Corpn Ltd vIpswich Plant Hire Ltd (1975)provides an
example. The claimants needed a crane in a hurry and made an oral contract to hire one
from the defendants. This contract was made subject to all the terms in the ‘Contractors’
Plant Association Form’ because both sides knew that whenever cranes were hired they
were hired subject to the terms contained in this form.
Only if the court does decide that the exclusion clause was a term of the contract will it
be necessary to move on to consider the effect of the Unfair Contracts Terms Act 1977 and
the Unfair Terms in Consumer Contracts Regulations 1999.

Olley vMarlborough Court Hotel Ltd (1949) (Court of Appeal)

A married couple booked into a hotel for one week and paid their bill in advance. During

their stay at the hotel the wife’s fur coat was stolen from their room. The hotel denied

liability because a notice in their room said that the hotel were not liable for lost or stolen

property, unless it had been handed in to reception for safe custody.

HeldThe notice was too late to be effective. The contract was made when the couple

booked into the hotel.

Thornton vShoe Lane Parking Ltd (1971) (Court of Appeal)

The claimant was badly injured in the defendants’ car park, the accident being partly caused

by the defendants’ negligence. The claimant had driven into the car park and passed a

notice at the entrance which said that cars were parked at the owner’s risk. When the

claimant stopped at a red light he was issued with a ticket. The ticket said on it that it was

issued subject to notices displayed inside the car park. These notices, which could only be

read once fully inside the car park, said that the defendants were not liable for damage to

goods or for injuries to customers. The defendants denied liability for the claimant’s injuries,

saying that the conditions displayed inside the car park were a part of the contract.

HeldThe notices inside the car park were not a part of the contract. By the time the

claimant had been given the ticket which referred to these notices the contract had been

made. ( The contract was made either at the time the claimant had put his money into the

machine or when he drove past the point at which he could no longer change his mind

about entering the car park.)