Mgmt 783 Business Law: Assignment Answers
James bought a ticket to watch the movie “Christopher Robin” at the Odeon Cinema. As he entered the darkened cinema, James fell on the slippery steps leading down to the seats. James is injured and attempts to seek compensation from the operators of the Odeon Cinema. The cinema operator denies liability, pointing to an exclusion clause found on the reverse side of the ticket issued to James. The exclusion clause states that the Odeon Cinema is exempted from any liability for any injury to the person or damage to property suffered by patrons to the cinema.
Required :
Advise James whether he is bound by the exclusion clause. Only refer to the common law position and do not discuss negligence or the Australian Consumer Law or any other legislation.
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.
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
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