Exclusion allowed where only one possible cause of
Articles were sent by the plaintiff to the defendants’ laundry to be washed, and they were lost. In an action by the plaintiff against the defendants for damages, the defendants relied on the following condition to limit their liability: ‘The maximum amount allowed for lost or damaged articles is twenty times the charge made for the laundry.’ Negligence was not expressly excluded. The question was: What do the words exclude?
Held: The defendant was able to rely on the exclusion clause. The loss could only arise through negligence. With that in mind, the limitation clause had to be read to apply to an allegation of negligence.
Lord Greene MR set out the principles applicable in interpreting clauses which purport to exempt one party to a contract from liability for negligence. These principles are (1) that if the clause expressly exempts the party in whose favour it is made (the proferens) from liability for negligence, effect must be given to it; (2) if there is no express reference to negligence, the court must consider whether the words used are wide enough to cover it; and (3) if a doubt arises on this point it must be resolved in favour of the other party and against the proferens.
If the words used are wide enough to achieve exemption, the court must then consider whether ‘the head of damage may be based on some ground other than that of negligence’
Lord Justice Mackinnon set out the rule or principle which he said was very admirably stated by Lord Justice Scrutton in Rutter -v- Palmer. He said: ‘Applying that principle to the facts of the case, I think that the clause in question does avail to protect the proprietors of the laundry in respect of liability for negligence which must be assumed to be the cause of these handkerchieves having disappeared.’
Lord Greene MR, Mackinnon LJ
[1945] KB 189, [1945] 1 All ER 244
England and Wales
Citing:
Applied – Rutter v Palmer 1922
A party is not exempted by his contract from his own negligence ‘unless adequate words are used.’
Scrutton LJ said: ‘For the present purposes a rougher test will serve. In construing an exemption clause certain general rules may be applied: . .
Cited by:
Cited – Societe Generale, London Branch v Geys SC 19-Dec-2012
The claimant’s employment by the bank had been terminated. The parties disputed the sums due, and the date of the termination of the contract. The court was asked ‘Does a repudiation of a contract of employment by the employer which takes the form . .
Cited – Hollier v Rambler Motors (AMC) Ltd CA 19-Nov-1971
The plaintiff left his car with the defendant garage for repair. Whilst there it was substantially damaged by fire. The defendant sought to rely upon their terms which would negative liability, saying that the terms had been incorporated by . .
Cited – Smith v UMB Chrysler (Scotland) Ltd HL 9-Nov-1977
The principles set out in Canada Steamship apply to ‘clauses which purport to exempt one party to a contract from liability’. The principles should be applied without ‘mechanistic construction’.
Lord Keith of Kinkel said: The tests were . .
Lists of cited by and citing cases may be incomplete.
Contract, Negligence
Leading Case
Updated: 10 November 2021; Ref: scu.470521