MGMT 783 Business Law: Exclusion Clause | Case Of Advise James

Answer:

Exclusion clause is a contract term that seeks to dismiss liability for loss and damage. For an exclusion clause to be legally binding, it must be included in the contract. Any document that contains exclusion clause must form part of the document used in the contract. It should not be just a receipt or payment acknowledgement. This is revealed in the case Chapelton v Barry Urban District Council (1940). In this case the defendant argued that the ticket had the exclusion clause, however, the High Court decision was that the ticket was either used as a receipt or voucher, hence could not form part of the contract (Open.edu, 2017).

Moreover, if the exclusion clause is used to dismiss liability, it must be extremely clear and precise in its drafting for it to be used to cover the occurred breach.  The only exception is the use a bill of lading provided by the master of a ship to those who send goods. The bill of lading acts as a receipt; but the law allows it to form part of the contract (Open.edu, 2017). Additionally, for any unsigned contract to be legally binding, the party affected by the exclusion clause must be satisfactorily informed of its presence either at the time or before the contract creation. This is well demonstrated in the case Thornton v Shoe Lane Parking. Therefore, I believe that James is not bound by the exclusion clause base on the unambiguity of the clause on the receipt he was given.

In the case of James seeking compensation for his injury after falling at Odeon Cinema, we can analyze whether he is bound by the exclusion clause based on common law principles.

Exclusion clauses in contracts are generally enforceable under common law if they meet certain conditions. These conditions include:

1. Incorporation: To be bound by an exclusion clause, it must have been brought to the attention of the parties before or at the time the contract was formed. In James's case, the exclusion clause is located on the reverse side of the ticket. The effectiveness of such "ticket terms" depends on whether the terms were reasonably communicated to James. If the clause was not prominently displayed or brought to his attention at the time of purchase, it may not be considered incorporated into the contract.

2. Reasonable Notice: Even if the exclusion clause was incorporated into the contract, it must be reasonable. Whether the notice of the exclusion clause was reasonable will depend on factors such as its visibility, clarity, and whether James had a realistic opportunity to read and understand it. If the clause was hidden in small print or otherwise inconspicuous, it may not be considered reasonable.

3. Unconscionability: Common law principles may void exclusion clauses if they are found to be unconscionable or oppressive, especially if one party (in this case, the cinema operator) has significantly more bargaining power than the other party (James).

In James's case, if the exclusion clause was not prominently displayed on the ticket and he did not have a reasonable opportunity to understand its terms before purchasing the ticket, he may argue that he is not bound by the clause. The enforceability of the exclusion clause would depend on the specific circumstances and the court's determination of the reasonableness of its notice.

Please note that this advice is based on common law principles and does not consider any other legal frameworks or specific Australian legislation.

References

Open.edu. (2017). Exclusion clauses: View as single page. [online] Available at: https://www.open.edu/openlearn/ocw/mod/oucontent/view.php?id=25556&printable=1 [Accessed 28 Aug. 2018].

Chapelton v Barry Urban District Council [1940] 1 KB 532