Thornton v Shoe Lane Parking Ltd - Assignment Example

Research Task 2 Name Course Tutor Date QUESTION 1 A case of Thornton v Shoe Lane Parking Ltd (1971) and why the exemption clause would not hold Facts about the case Mr Thornton drove to a multi storey car parking entrance at Shoe Lane prior to attending an event hosted at Farringdon Hall. He got the ticket from an automated machine, and proceeded to park his car. The ticket was written a clear warning that ticket issuance was subject to terms and conditions displayed on the walls of the premises. Further, there was a notice on one of the pillars at the car park with an excluding liability for any injury or harm caused to the customer, and loss, misdelivery or damage to the property. After three hours, Thornton had an accident just outside his car, sued the car park company to claim for compensation but the car park company came with an argument that the judge should have conveyed a conviction that the subject be regulated by contract terms rather than tort. This case is similar to past cases involving tickets but what makes it unique is that the issuance of the ticket is through an automated machine and not a clerk. Judge’s easons why exemption clause in the case would not apply From the facts of the case, Judge Lord Denning held that in order to make a clause more burdensome, an improved notice is required. Further, when the ticket was given out by the automatic machine, the contract had already been concluded and therefore, there was no condition that would be integrated into a concluded contract. The car park company seeks to be exempted from liability from any damage caused to the car and also for any injury caused to their customer howsoever caused. However, the case has no implication on the tickets issued by the company’s automatic machine. Customers pay their money to get tickets and they cannot refuse it at choice and get their money back and even if they protested and swore at the machine, they could not get a refund of their money. They are, in short, committed beyond recall, from the very moment money is put into the machine. Therefore, offer and acceptance was translated in this manner: when the proprietor of an automated machine gives it out to receive money, an offer is made, and when customers place their money into the machine slot, acceptance occurs. Further, the contract terms are contained in form of a notice displayed near or at the machine and stating reason for paying the money to the machine. Therefore, if the notice is sufficiently displayed to the attention of the customer, then he is bound by those conditions, and not otherwise. The terms printed on the ticket are not binding at all because they come too late. The applicability of the principle of this case can be argued that a condition or term or commonly known as an exclusion clause, cannot be informed to the relevant party or parties after the contract has been formed. The judge, Lord Denning, unfolded that Thornton, the complainant, had already made a contract when he inserted money to the automated machine of the car owner, and by the time he drove away from the machine, it was obviously late to include an exclusion of liability for personal injury to Thornton. Therefore, the notice that was placed at car entrance only served to exclude liability to the damaged car and had to warning to illustrate the personal injury liability was excluded as well. Therefore, the garage company did not escape liability by basing their reasons on the exemption terms and the judge dismissed the appeal of the car owners. QUESTION 2 A. Unfair Terms Contract Act 1977 (i) The long title for Unfair terms contract Act UTCA(1977): (ii) The Royal date of assent is 1977 (iii) The commencement date stated in Section 31(1) of the Act is (1) is 1st February 1978.  (iv) The heading for section 2 is “Negligence liability” whereas that for section 3 is “"Guarantee" of consumer goods” B. Martin, J. & Turner, C, “Contract Law Key Facts” (i) The principle aim of Unfair Contract Terms Act(UCTA) 1977 is to regulate contracts by way of restricting their operation and the legality of the contract terms. Nearly all the contracts are affected by UCTA because it limits the application of some disclaimers of liability on notices and actual contracts. Some of the limiting or excluding terms are rendered ineffective based on reasonableness or on whether the obligation intended to be excluded and on whether the party intending to exclude is acting against a consumer1 (pp. 64-65). (ii) Ways through which UCTA achieves its aims: In order to achieve its aims, UCTA 1977 has based its exclusion terms based on reasonableness on the part of negligence, indemnity and misrepresentation as discussed2: Under negligence, any form of exclusion other than that for personal injury and death has to meet the requirements of reasonableness. The indemnity clauses require that any party who is dealing with the consumer does not have the legal capacity to indemnify third parties on behalf of other parties, unless the indemnity meets the standard of reasonableness. Further, section 8 substitutes 1967 Misrepresentation Act section (3) by the assertion that the exclusion for misrepresentation has to meet the test of reasonableness. (iii) Exclusion clause made invalid by section 2(1) and 5 (1) of UCTA 1977. Section 2 is about negligence and 2(1) shows that any negligence that is capable of occasioning personal injury or even death is not excluded. Further, section 5 (1) is about Manufacturers’ guarantee and holds that any loss arising out of negligence on the part of the distributer or defective goods is not excludable is a situation the goods are meant for consumption or private use. QUESTION 3 The Red Hand Rule according to Koffmann and Macdonald “Contract Law” and investigation as to whether the Red Hand Rule is still required to protect consumers in today’s society, since UCTA 1977, can provide protection against unfair exclusion clauses. At times, the incorporation by notice may lead to some difficulties in the sense that a person is bound by the conditions incorporated in the contract3, but which the person would not have consented to if he had the actual notices of the exemption clauses. Therefore, if a term is unusual or more exceptional, then a lot has to be done in bringing the exceptional information to the other parties4. Therefore, the red hand rule requires that more unreasonable clauses should have more notice of the clauses that have been given5. The law concept on the Red Hand Rule can well be explained in Spurling v Bradshaw case. If a clause is more unreasonable, a greater notice must be given of it, and some of these clauses have to be printed using the red ink and showing a red hand pointing to the notice. In the High Court’s decision about Toll Pty Ltd Vs Alphapharm, the high court had to consider if the indemnity and exemption had a credit application, had been signed by the plaintiff and, were binding. Although the high court did not directly refer to the red hand rule, in its unanimous judgment signaled clearly to the question of red hand rule applying to signed documents. With the UCTA, some unusual clauses have been excluded from the contract terms due to the fact that they do not bear the requirements for reasonableness. In circumstances that require red hand rule to exclusion of liability from personal injury, UCTA makes it clear that such a term is unreasonable and should therefore, not be excluded from contract terms. In other words, if they are deemed unreasonable, they are as well invalid or have no application in protection of consumers. However, if the excluded clauses in a contract remain reasonable as per the definition of reasonableness outline by UCTA, and further appear unusual, then such a case will call for the application of the red hand rule. References Berglund, A The Validity of Exemption Clauses in Commercial Contracts - A Comparison with Anglo-American Law, Lunds universitet/Juridiska institutionen, 2004. . Chris, T Unlocking Contract Law, Hodder & Stoughton, London, pp. 64-65. Kidner, R The Unfair Contract Terms Act 1977: Who deals as consumer? Northern Ireland Legal Quarterly. 38, 1987, 46-57. Kovač, M Cancelation of Contracts in English, French and Chinese Law. Pressing Problems in the Law and Legal Education, 2012. . Lilydale, K. S. and Clarke, B Incorporation of Unusual or Unreasonable Terms into Contracts : the Red Hand Rule and Signed Documents, Deakin University, 2006. http://hdl.handle.net/1959.3/5665 Read More