Having examined in great depths what exclusion clauses are and how they operate and also the circumstances in which they may be considered invalid, in light of this lengthy discussion lets now look at the application of these in relation to the case in question. PC Ltd has entered into a contract with Droppit Ltd where they agree that Droppit Ltd should store computer hard disks for the former. However part of the consignment gets damaged while in the warehouse of Droppit Ltd. In addition one of the employees of the PC Limited is injured .
The damage to the consignment and the injury to the employee are caused by negligence of the other party to the contracts (Droppit Ltd). PC Ltd approaches the other party seeking compensation in form of damages for damage to the goods and injury to the employee. Droppit Ltd has declined to pay damages and advances the following argument. To begin with they had brought notice of the existence of the exclusion clause to the other party. However the exclusion clause was printed in faint blue and was at the back of the paperwork. That is one weakness with the exclusion clause in that it may be said that it did not serve as sufficient notice.
But according to the facts the two parties have always dealt with each other in a similar and according to the court then this is deemed as proper incorporation of the exclusion clause to the contract. Another major weakness of the exclusion clause is that it was brought to the attention of the other party after the accident had already occurred. In the eyes of the law, this was not sufficient notice as Droppit Ltd ought to have brought to the attention of the other party before the contract commence being operational. Examining the general case in light of the earlier discussion, this exemption clause is not valid for the following reasons:
1. It was brought to the attention of the other party way too late. 2. Even though they have always dealt with each other in a similar manner the fact that clause was printed in faint ink and at the back of the paperwork could be interpreted to mean that the other former did not take reasonable steps to bring the clause to the attention of the latter. 3. Most importantly courts do not allow exclusion clause that condone negligence and recklessness. In this case damage to the good and injury to the employer was out of sheer negligence. In this case therefore the exclusion clause is invalid and therefore ineffective and non-operational.
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