Table of Contents Page 1. Issues ................................................................................................ 2 2. Unfair Terms and Exclusion Clauses ................................................ 2 2.1 Common Law .................................................................................

2 2.2 Unfair Contract Terms Act 1977 ..................................................... 3 3. Relevant Cases .................................................................................. 3 (a) Taylor v Glasgow Corporation ........................................................ 3 (b) Henderson (steam-packet co) v Stevenson, Hood v Anchor Line.. ... 4 (c) Olley v Marlborough Court Ltd ....................................................... 5 4. Conclusion ........................................................................................ 6 5. References ........................................................................................ 7

1. Issues The issues identified here are that Frank suffered injuries when he was hoisted from the cruise ship to a lifeboat. He seeks compensation from Packer Line but was informed that he was limited to one of the condition of liability for injury up to $500 written on the back of his ticket. Frank is bound by the conditions to his contract and is unable to claim compensation in excess of $500.

2. Unfair Terms and Exclusion Clauses An attempt to exclude or limit liability either by express term in contract or an attempt to incorporate an exclusion clause into the contract by reference to conditions in another document or ticket.

2.1 Common Law a) Ticket cases-integral part of contract /adequacy of notice of conditions. b) Construction contra proferentem. An ambiguous condition in a contract is interpreted against the person putting it forward to the weaker party. c) Penalty clauses a contract will contain a provision that in event of breach of contract the person in breach will become liable to pay to the other party a stipulated sum of money. The court will only give effect to such a clause if it is a genuine pre-estimate of loss. If it is a penalty out of proportion to the loss then the court will not enforce it.

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2.2 Unfair Contract Terms Act 1977 Under UCTA, Certain exemption clauses are prohibited. There are two methods for controlling exemption clauses:  It makes some types of clauses void (if death or personal injury resulting from negligence)  It subjects others to a test of reasonableness (must satisfy the requirement of reasonableness)

3. Relevant Cases (a) Ticket must be an integral part of contract and not merely a voucher. 1 In Taylor V Glasgow Corporation 1952 SC 440, The pursuer visited Woodside Baths in Glasgow. She paid for and received a ticket to give to the pool attendant. On the front of the ticket was printed for conditions see other side and on the back of the ticket the clause said Glasgow Corp would not be liable should the users of the baths injured. Mrs Taylor fell in the baths and was injured. She alleged it was due to negligence by the corporation employees. The corporation argued that the pursuer was barred from raising an action because of the exclusion clause in the contract. The pursuer knew there was printing on the ticket but had not read the conditions. The court held the ticket was not of a type which a person could reasonably scrutinize for conditions. The pursuer was entitled to regard the ticket as a voucher which she was to hand over to use the baths. The exclusion clause was ineffective as the ticket was merely a voucher.
1 CAUSER v BROWNE 1952. At the drycleaners, Browne received a receipt of the dry-clean service

without knowledge of the terms written on the receipt. The plaintiff messed the clothes up. Browne complained and did not pay. The plaintiff argued that terms on the receipt stated that he was not liable for any damages made to the laundries. The plaintiff lost the case as the judge agreed that it wasn't obvious that the receipt had terms of contract on them.

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(b) Conditions on ticket must be brought to the other persons notice.2

In Henderson (steam-packet co) v Stevenson 1875, a condition on the back of a steamer ticket excluded liability for loss of luggage. The defendant did not draw Stevensons attention to the conditions on the back of the ticket. The steamer sank and Stevenson raised an action for his lost luggage. The court held that the exclusion clause was not incorporated into the contract as the notice of the clause was not adequate.

In Hood v. Anchor Line, a steamship passage ticket was delivered to the passenger in an enclosed envelope and on the front, a notice printed in capital letters requesting the passenger to read the conditions of the enclosed contract. The ticket contained a notice that it was issued subject to conditions thereinafter set out and at the foot was a printed request to the passenger to read the contract carefully. The court held the steamship company to have taken all reasonable steps to bring to the knowledge of the passenger the existence of the conditions. Hood sued for injuries occasioned to him by the negligence of the defendants servants that caused him harm when he was being transferred from the defendant's grounded steamship to another ship. The court held that the decisions are in favour of the defendant on the basis that

RICHARDSON SPENCE & CO & THE LORD GOUGH STEAMSHIP CO LTD v ROWNTREE (1894). Minnie Rowntree was injured upon a steamer on a trip from Philadelphia (USA) to Liverpool (UK). She claimed compensation for personal injuries and was awarded 100. The steamship company sought to rely upon a booking condition on the front of the ticket limiting its liability to US$100. When Minnie Rowntree paid for her ticket, it was handed to her folded up by the ticket clerk so that no writing was visible unless she opened and read it. Nothing was said to draw her attention to the fact that her ticket contained any conditions. She did not open and read the ticket. The court held that although Minnie Rowntree was aware that there was writing or printing on the ticket she had not been given notice of the booking conditions in the circumstances in which the ticket was issued. She was therefore entitled to receive the full 100. And one of the law lords has observed that Minnie Rowntree was only a steerage (2nd class) passenger with little education, that the condition was printed in small print and that it had been stamped across in red link making it almost illegible in any case.

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the passenger was bound by the limitations of liability set forth on the ticket. The defendant was able to successfully resist an action by the plaintiff for damages.

In relation to the scenario of Frank, he is unable to sue Packer Line for injuries caused and is limited to damages of $500.

(c) Notice of exclusion clause must be given to the other party before the contract is formed. In Olley v Marlborough Court Ltd 1949, a husband and wife checked into a hotel room which was paid for in advance. When the wife entered the room, she saw a notice on the wall stating that the hotel disclaimed liability for loss of valuables unless they were handed to the management for safe-keeping. The wife locked the room and gave the key to the reception. A thief got the key and stole her fur coat. The court held that the defendants were liable as the contract was concluded at the reception desk and the terms of the notice in the bedroom were not incorporated in it.

Rather than assessing whether the customer had an obligation to read the terms, the question should be whether the company has done what was reasonably sufficient to give the customer notice of the conditions. If reasonable steps are taken, it does not matter that the recipient of the notice did not read the terms or that he or she was unable to read.3

3 THOMPSON v LM & S RAILWAY CO. The plaintiff who could not read gave her niece the money to

buy an excursion ticket. On the face of the ticket was printed Excursion, For Conditions see back; and on the back, issued subject to the conditions and regulations in the companys time-tables and notices and excursion and other bills. The conditions provided that excursion ticket holders should have no right of action against the company in respect of any injury, however caused. The plaintiff stepped out of a train before it reached the platform and was injured. The court held that anyone who took the ticket was conscious that there were some conditions and it was obvious that the company did not provide for the price of an excursion ticket what it provided for the usual fare. Having regard to the condition of education in this country, it was irrelevant that the plaintiff could not read.

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4. Conclusion

A reasonable man would see the notice given on the envelope or ticket stating the terms and conditions as it is obvious enough and Frank chose to take the risk of not reading the conditions in the face of the warning on the envelope that the conditions would bind him. Therefore, Packer Line is able to rely on the booking conditions and the compensation to Frank will be limited to $500.

Word Count: 995

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5. References Anthony J Cordato. Australian Travel and Tourism Law. 4th Edition. Australia: LexisNexis Butterworths, 2006. Atherton, Trevor, and Trudie Atherton. Tourism, Travel and Hospitality Law. 2nd Edition. Australia: Thomas Reuters, 2011.

Business Law: http://www.scs.cuhk.edu.hk/vu/blo1105/

Cases - http://faculty.law.ubc.ca/biukovic/supplements/Schuster.htm Exclusion clauses cases: Asif Tufal, http://www.lawteacher.co.uk/

Exclusion clause: http://lawiki.org/lawwiki/Exclusion_clause

Incorporating Written Terms: think.io/pub/.../Incorporating%20Written%20Terms.doc

Terms of the Contract: http://www.vanuatu.usp.ac.fj/courses/LA201E_Law_of_Contract_1/LA201E_topic8_ unit3.html

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