Exclusion Clause Aimed Excluding Liability â€Myassignmenthelp.Com

Question: Discuss About The Exclusion Clause Aimed Excluding Liability? Answer: Introducation A company named Rocky Pop Pty Ltd is planning to organise a rock concert where it is expected that a Metalurgica (a famous heavy metal band) would turn up as has been listed in the various promotional materials put on the internet and the newspaper. The advertisement highlights the price of each ticket as $ 150 and also mentions the manner in which the ticket can be bought. One customer Rachael books the ticket and makes the requisite payment and as promised gets the physical ticket delivered within five days. The ticket mentions exclusion clause related to no liability of the company in the event Metalurgica cannot take participation in the event. The band members of the Metalurgica band are arrested in drug case and therefore are not able to participate in the concert. As a result, the company invites Hayseeds whose genre of music is quite different from Metalurgica and hence Rachael claims refund to which the company cites the exclusion clause printed on the ticket and therefore d enies refund. The likelihood of Rachaels claim being successful needs to be determined. Relevant Rules Exclusion clause refers to a term inserted in the contract with the objective of limiting or exempting one of the contracting parties from the liability arising due to enactment of a particular situation which is foreseeable (Paterson, Robertson and Duke, 2015). The exclusion clause tends to be enforceable only if the following conditions are met by the party inserting the term. Communication of the exclusion clause to the contracting party before the contract enactment In line with the common law, the applicability of exclusion clause is dependent whether reasonable effort was undertaken by the party inserting the same to bring to notice the clause so that informed consent of the other contractual party can be gained. It is noteworthy that actual informed consent is not required as the only requirement is that exclusion clause communication was carried out in a reasonable manner before contract enactment (Latimer, 2005). A pivotal case highlighting the importance of prior communication is Thornton v Shoe Lane Parking [1971] 1 All ER 686. This case relates to the use of commercial parking space by the plaintiff where it was clearly mentioned that for the vehicle the risk would be solely borne by the owner. Despite this, Mr.Thornton decided to park his car and thereby accepting the vehicle risk. However, he got injured in the process and hence asked for damages from the company managing the parking space. The company cited the exclusion clause printed on the parking ticket which highlighted that the company owes no liability of any damage to the driver. The matter landed in court where it was brought to notice that the exclusion clause was not communicated before contract enactment as the parking ticket was issued after the car was parked. Therefore, the issuance of ticket happens after contract enactment and hence it was decided by the honourable court that the exclusion clause would not be considered as Valid (Carter, 2012). Another case where this aspect is visible is Olley v Marlborough Court [1949] 1KB 532 case. Here, the plaintiff suffered a stolen musk coat from a hotel room and the hotel cited the exclusion clause which was cited in the bedroom and not told to them at the reception when the contract was being enacted. Hence, the honourable court rendered the exclusion clause as invalid and put the damages suffered by the customer on the hotel (Lindgren, 2011). An additional requirement is that exclusion clause must be legal and hence should not be inserted with the intention to deceive or misguide the consumers. Any such exclusion clauses inserted with the intent to cheat customers are void irrespective of the prior communication or not (Harvey, 2009). Application The given case facts hint towards presence of exclusion clause by the company in order to evade any liability in the absence of Metalurgica from the grand event planned by the company. Since the exclusion clause highlighted on the physical ticket cannot be considered as explicit, hence for ensuring the enforceability of the clause, the company should have communicated the same to the potential customers before they paid for the ticket. However, the advertisements put by the company through different media fail to mention this particular clause. Also, there is no mention of any other measure that the company took to inform customers like Rachael about the existence of the clause. Thus, the exclusion clause was communicated to Rachael only after the receipt of physical ticket while the contract was enacted when the payment for the ticket was made by Rachael. Hence, the above observations clearly highlight the lack of any effort on the part of the company to communicate the exclusion clause before contract enactment. Further, a critical parameter is that after the Metalurgica band members were prisoned, the company brought in a band (Hayweeds) whose genre was quite different from Metalurgica and hence may not be liked by a sizable ticket purchasers including Rachael. Considering the above discussion, it is apparent that the exclusion clause inserted by the company would not apply and the company would have to make the refund to Rachael. Conclusion On the basis of relevant rule along with the case facts highlighted above, it would be appropriate to consider that the company failed to communicate the exclusion clause to the customer in time i.e. prior to contract enactment. Thus, it would be not considered enforceable and the order to refund the money to Rachael would be given by the Court acting on the similar cases in the past. As a future advice, it is imperative for the sellers to take all reasonable efforts to highlight the exclusion clauses to the buyers before the contract is enacted so that these can be enforced at a later stage if required. In order to protect the interests of the consumer, the Australian Consumer Law or ACL was enacted in 2001. One of the most often used provisions of ACL is s.18 which aims to safeguard the consumer interests against any wrong conduct which could mislead or deceive customers. This section prohibits any deceptive or misleading conduct on the part of any entity or person having involvement in commerce or trade. The section as part of the objective to safeguard consumer also extends to any activity when may not be directly deceptive but can has potential to act against consumer interests (Davenport and Parker, 2014). One of the ways to deceive customer is through the use of misleading advertisements in order to increase the business while jeopardising the consumer interest. A leading case in this regards is Australian Competition and Consumer Commission v TPG Internet Pty Ltd[2013] HCA 54. This case involved misleading advertisements where the conditions were written in very small letters while the headline was so prominent that any reasonable customer could potentially be misled. As a result, it was highlighted that focus of the advertisement must not be limited to only headlines but should extent to all pivotal aspects including terms and conditions (Gibson and Fraser, 2014). The advertisement in the given case which the company has highlighted on the internet and newspaper does not mention that the ticket is non-refundable and also exclusion clause which is highlighted in the physical ticket. However, in such events, this is normally present and also the failure to mention the same would not have a defining impact on the decision making of the potential customers. Further, the company was not misleading the customers by citing that Metalurgica band would be present in the event. Infact had the band members not been arrested, in all likelihood, they would have turned in for the event. Thus, there was no intention to mislead the customers and also the impact on the decision making would be limited which implies that no violation of s.18 has been done by the company. Section 64 tends to safeguard the interests of the buyers by restricting the right of the sellers to insert various terms limiting the guarantee of key pivotal rights which ought not be exempted. The advertisements on internet and newspapers can be termed as display notices and hence only those provisions which are clearly highlighted and hence accepted by the client may apply depending on the exact content (Lindgren, 2011). The non-refunding nature of the tickets was not mentioned coupled with safeguarding itself from any potential liability if Metalurgica band did not turn up. Thus, the basic guarantee of product or service coupled with refund right especially when the attributes of the service alter cannot be taken away. Thus, the conduct of the company is in violation of s.64 and also the various provisions to limit liability and not refund the money would not be considered as valid (Gibson and Fraser, 2014). References Carter, J. (2012) Contract Act in Australia. 3rd edn. Sydney: LexisNexis Publications. Davenport, S. and Parker, D. (2014) Business and Law in Australia. 2nd edn.. Sydney: LexisNexis Publications. Gibson, A. and Fraser, D. (2014) Business Law. 8th edn. Sydney: Pearson Publications. Harvey, C. (2009) Foundations of Australian law. 3rd edn. London: Tilde University Press. Latimer, P. (2005) Australian business law. 24th edn. Sydney: CCH Australia Ltd. Lindgren, K.E. (2011) Vermeesch and Lindgren's Business Law of Australia. 12th edn. Sydney: LexisNexis Publications. Paterson, J. Robertson, A. and Duke, A. (2015) Principles of Contract Law. 5th edn. Sydney: Thomson Reuter