Keenan and Riches’BUSINESS LAW

Chapter 9The terms of business contracts

295

Figure 9.5Exemption of statutory implied terms in contract for the supply of goods

Exemption clauses in contracts for the supply of goods by way of:

Sale, HP, exchange and Hire

work +materials

Consumer Non-consumer Consumer Non-consumer

transaction transaction transaction transaction

Title Void Void Subject to Subject to

reasonableness reasonableness

test test

Description Void Subject to Void Subject to

reasonableness reasonableness

test test

Quality and Void Subject to Void Subject to

Suitability reasonableness reasonableness

test test

Sample Void Subject to Void Subject to

reasonableness reasonableness

test test

Implied Terms

Waldron-Kellyv British Railways

Board(1981)

The claimant placed a suitcase in the care of BR at

Stockport railway station for delivery to Haverford West

railway station. BR’s General Conditions of Carriage lim-

ited its liability for non-delivery to an amount assessed

by reference to the weight of the goods. The suitcase

disappeared and the claimant claimed £320.32 as the

full value of the suitcase. BR sought to rely on its con-

ditions, which limited BR’s liability to £27. It was held

that BR could not rely on the exemption clause because

it did not satisfy the requirement of reasonableness. The

claimant was awarded £320.32.

Woodmanv Photo Trade Processing

Ltd(1981)

Mr Woodman deposited a reel of film containing pictures

of a friend’s wedding with the defendants for processing.

Unfortunately, most of the pictures were lost, and when

sued the defendants relied on the following exclusion

clause: ‘All photographic materials are accepted on the

basis that their value does not exceed the cost of the

material itself. Responsibility is limited to the replacement

of the films. No liability will be accepted consequential or

otherwise, however caused.’ The county court judge

held that the clause was unreasonable for the following

reasons: (a) the clause was in standard use throughout

the trade and so Mr Woodman had no real alternative

but to have his film processed on these terms; and (b)

the code of practice for the photographic industry envis-

aged the possibility of processors offering a two-tier ser-

vice, either a lower price but with full exclusion of liability

or a higher price with the processor accepting fuller liab-

ility. Mr Woodman was not offered such a choice. He

was awarded £75 in compensation.

Comment. The Woodmancase indicates that failure to

provide customers with an alternative is likely to lead to

any exemption clause being declared unreasonable.

However, it is not enough merely to inform customers

that an alternative exists: sufficient detail must be pro-

vided for customers to be able to exercise a genuine

choice. In Warrenv Truprint Ltd(1986), another county

court case involving lost film, the defendant film proces-

sors had made the following addition to their limitation

clause: ‘... we will undertake further liability at a supple-

mentary charge. Written details on request.’ The judge

held that this did not pass the reasonableness test since

the defendants had failed to ‘plainly and clearly set out

the alternative’ and the cost to the customer.