GREAT ZIMBABWE UNIVERSITY

NAME HOPE
SURNAME SIBANDA
REG NO M178788
LEVEL 1.1
PROGRAME ACCOUNTING
MODULE COMMERCIAL LAW AC100
LECTURER MR PHIRI

QUESTION Generally a party must be aware of the terms before or at the time
of contracting. However in respect of exclusion of liability clause, a party has knowledge of
these terms generally after the contract had been concluded. Discuss how the law
enforcement will deal with such clause.
A contract is a daily or ongoing process members or people practise. This essay seeks to
discuss how the law deals with the enforcement of exclusion clauses that is a party will get
terms and conditions of the contract after accepting the contract that is agreement.
A contract is a voluntary agreement between two or more parties that a court will enforce.
The rights and obligations created by a contract apply only to the parties to the contract
(i.e., those who agreed to them) and not to anyone else. Also a contract is an agreement
enforceable in a court of law. It is an agreement which legally binds the parties. The
underlying theory is that a contract is the outcome of “consenting minds", each party being
free to accept or reject the terms of the other. This is referred to as contractual freedom.
There are terms of contract which can be needed when two or more parties enter in an
agreement and these are as follows.

Firstly, a contract is made when there is a meeting of the minds. The meeting of minds is
called "consensus ad idem". This is when the words that the parties speak, or the actions that
the parties perform are all at one and this is a subjective approach to the establishment of the
existence of a contract. It can also be established by looking at the conduct of the parties. If a
party by his words or actions has led a reasonable person to believe that he is in agreement
with him, then there is a contract. Any mental reservations in his mind are in such
circumstances irrelevant. Such a party is estopped (prevented) from denying that there is a
contract. This principle is called quasi mutual assent or the doctrine of estoppel. (Springvale v
Edward). The person who makes the offer is known as the offeror and the person to whom
the offer is addressed made is the offeree.
In addition, an offer is also needed when making contracts. An offer is a definite promise to
be bound by the terms of the offeror; it is a set of proposals of the terms upon which one
intends to be bound under contract. An offer must be definite not vague. However, if an
apparently vague offer is capable of being made certain, either by implying terms or by
reference to previous dealings between the parties, or within trade, then it will be regarded as
certain. For instance when we look the case of Kantor v Kantor, a husband promised to settle
and renew furniture and domestic effects on his future wife after that the husband did not
fulfil his promises and the court was held. Since there was no offer in contract between Mrs
Kantor and Mr Kantor the agreement was indeed unenforceable since the terms were unclear
and left the donor “free to act or not at all”. The agreement gave Mr Kantor an “unlimited
option” leaving the offer open at the whim of the offeror. To clarify in this case, if there was
an offer, maybe Mrs Kantor will benefit from the promise. An offer must be made with the
serious intention to create a contract and the seriousness is called animus contrahendi. For
example, the case between Rex v Crawley.
Another term of contract is acceptance and it can be categorised into express or implied
signification by the offeree of intention to be bound by the offeror's terms. It may be in
writing or oral or it may be inferred from conduct e.g. by dispatching goods in response to an
offer to buy. An acceptance must be definite, it must be unequivocal. It must be unqualified
and must correspond to the terms of the offer. A counter offer is insufficient and it amounts to
a rejection. A conditional assent is not enough either e.g. when an offer is accepted subject to
a written contract. Acceptance should not be based on some justifiable mistaken belief.
Acceptance must be communicated. Acceptance is not effective until communicated to and
received by the offeror. Acceptance must be communicated by the offeree or by someone
with his authority. There are three theories to acceptance: reception theory, information
theory and expedition theory. Thus offer + acceptance =Contract.
Exclusion clauses, according to Christie are terms which seeks to exempt one of the parties
from the liability which seeks to limit liability to specific sum. A clause maybe inserted into
a contract which aims to exclude one party’s liability for breach of contract. However, the
party may only rely on such clauses if it has been incorporated into the contact, if it is a
matter of interpretation, it extends to the loss of question. Its validity will then be tested and
the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts
Regulations 1999.When we are dealing with exclusion clauses we should look whether the
clause is incorporated or not, is the liability in question covered by the clause and to look if
there any cases or legislation regulating its effect.
Generally, the clause can be incorporated by signature, by notice and by the previous course
of dealings. For example, if the plaintiff (consumer or buyer of something) signs a document
having contractual effect containing exclusion clause, it will quickly form part of the contract
and he/she is bound by its conditions or terms. This so even if the plaintiff has not read the
document and regardless of whether he understands it or not. We can take a look at the case
of L’Estrange v Graucob (1934) with signed documents. The plaintiff purchase a cigarette
machine foe her café from defendant and signed a sales agreement without reading it and the
agreement provided that any express statement or warrant is excluded. The machine failed to
work properly and in the action for breach of warranty the defendants were held to be
protected by the clause. The law deals with the enforcement of exclusion liability in the
benefit of defendants that is Scrulton LJ said when a document containing contractual terms
is signed, then, in the absence of fraud, misrepresentation, the party signing it is bound and it
is wholly immaterial whether she has read the document or not.
Again, the exclusion clause may be contained in an unsigned document such as tickets and
notices. In such a case, one should be given reasonable or sufficient notice of the existence of
the exclusion clause and for this requirement to be satisfied, it should include that the clause
must be contained in contractual, the existence of the exclusion must be brought to the
noticed of the other party before or at the time the contract is entered into. This can be
clarified by the case between Parker v South Eastern Railway 1877 that says: the plaintiff
deposited a bag in a cloak room at the defendant’s railway station and he received ticket
which read see back and on the other side were printed several clauses including that the
company will not be responsible for any package exceeding $10. The plaintiff presented his
ticket on same day but his bag was not found and it cost more than the intended one of $10
and the company pleaded the limitation clause in defence. In the Court of Appeal, Mellish LJ
said if the person receiving the ticket did not see or know that there was any writing on the
ticket, he is not bound by the ticket and if he knew and believed that the writing contained
conditions he is bound by the condition.
In addition, exclusion clause may be contained or based on previous course of dealings that is
terms used by a company previously cannot apply next when you bought something. Even
where there has been insufficient notice, an exclusion clause may nevertheless be
incorporated where there has been a previous consistent course of dealing between the parties
on same terms. This can be expressed by the case between by Spurling v Bradshaw 1956
which says the defendant delivered eight barrels or orange juice to the plaintiffs who were
warehouseman. A few days after the defendant received document from the plaintiff which
acknowledge the receipt of barrels. It contained a clause exempting the plaintiffs from
liability for loss caused by themselves, employees or agents and when the defendant collects
the barrels, some were contained dirt water and some were empty and he refused to pay the
storage charges and was sued by the plaintiffs and the law was held. The law deals with this
enforcement that although the defendants did not receive the document containing the
exclusion clause until after the conclusion of the contract, the clause had been incorporated
into the contact as a result of a regular dealings between the parties over the years. The
defendant had received similar documents on previous occasions and he was now bound by
the terms contained in them.
To sum up, exclusion clause may be contained with the battle of forms. Quarrels arises when
one party sends a form saying that the contract is made on those terms but the second party
accepts by sending a form with their own terms on and stating that the contract is on the
second party’s terms. “The rule of thumb “here is that the contract will be made on the last
set of terms send. The case between British Road Services v Arthur Crutchley Ltd 1968
explains the thumb rule that is British delivered whisky to ACs warehouse, who were motor
dealers, to supply a car for touring purposes. The defendants recommended a Bugati, which
the plaintiff bought. The written contract of excluded the defendants liability for any
guarantee or warranty and the car did not work according to the purpose, so he refused to pay
and sued to recover what he paid. Then the Court of Appeal held that the car be suitable for
touring was a condition. Since the clause did not exclude liability for breach of a condition,
the plaintiff was not bound buy it.
Moreover, even where an exclusion clause has been incorporated into a contract, it may not
have been incorporated in a collated contract, This can be easily understood by reviewing the
case between Andrews v Hopkinson 1957, the plaintiff so a car in a garage which the
defendant describes as follows”: It’s a good little bus. I would stake my life on it.”The
plaintiff agreed to take it on hire purchase and the defendant sold it to a finance company
who made a hire purchase agreement with the plaintiff. When the plaintiff received the car,
he signed that he was satisfied by it and shortly after that the car crushed due to defect in
steering. The plaintiff was stopped to sue finance company because of the delivery not but to
sue the defendants. The law deals with this enforcement on the side of plaintiff and suggest
that the defendants are liable because there was a collateral contract with the defendant who
promised the car in good condition and in return the plaintiff promised to make hire purchase
agreement.
Conclusively, the party to a contract should be aware of the terms and conditions before the
time of contract but however, in respect of exclusion of liability clauses, a party has
knowledge of these terms generally after the contract has been made. Due to the situation of
exclusion clauses, either the defendant or plaintiff will be liable or viseversa and the above
discussion shows how the law deals with exclusion clauses.

REFERENCES
Jane P. Mallor (1976) Basic Contacts Concepts and Types
A.James Barnes, J. D (1976) McGraw Hill International Edition
Arlen W. Langvardt: McGraw-Hill: International Edition
McNally Financial Training Company Corporate and Business Law- F4 (Zimbabwe) (2007)