Exemption clauses 121Construction
In this context construction means interpretation. The court will ask the
question: Can the exemption clause be construed (or interpreted) to cover
the damage which has arisen? Two rules are used to help answer the
question: the main purpose rule and the contra proferentem rule.
The main purpose rule
The courts will not allow an individual term to defeat the main purpose of
the contract. So if an individual term contradicts the very reason for the
contract being made, that term will not stand. The following case provides
a good example of this.
The contra proferentem rule
Any doubt or ambiguity in an exemption clause will be interpreted against
the person seeking to rely on it (or proffering it), as seen in Houghton v
Trafalgar Insurance (1954), where the word ‘load’ in a car insurance policy
was held not to extend to an excess of passengers.
Other common law principles
An overriding oral statement may contradict an exemption clause, as in the
following case.
Glynn v Margetson (1893)
A clause allowed a ship to call at any port in Europe or North Africa.
While under a contract to carry oranges from Malaga to Liverpool, the
captain relied on this clause to give him the freedom to go into the
Mediterranean to pick up extra cargo. While this would not have mattered
if he was carrying non-perishable goods and time was not important, in
this case it meant that the oranges deteriorated, so were not ‘in good
condition’ as the contract required. The clause would therefore have
defeated the purpose of the contract, so was not allowed to stand.Mendelssohn v Normand (1970)
A garage attendant advised a customer to leave his car unlocked, and
items were later stolen from the car. An exclusion clause disclaimed
liability for stolen goods, but this was held to be ineffective because of
the oral statement of the attendant.