it is to operate must be given reasonable notice of its existence. Whether such
notice has been given is determined according to the following principles: “
(1) If the party against whom the clause operates has actual knowledge of
the clause at the time when the contract is concluded he is inevitably
bound by it.
(2) When there is no actual knowledge, the party against, the clause
operates will not be bound if he has no reason to believe that the
document containing the clause contained contractual terms.
(3) If the party against whom the close operates has reason to believe that a
document given to him contents contractual terms it may be borne by
those terms, including any exclusion clause, even though he does not
choose to read the document; if the document contains what is
reasonably necessary to bring the terms to the attention of the reader,
the recipient will be bound but he will not be bound if he does not do
so.”
In the case of Atlantic Shipping and Trading Company Limited v Louis Dreyfus
and Company [1922] AC 250, the requirement that an exemption clause must
clearly state what is exempted was followed. It was held that un-seaworthiness
was no where mentioned, nor is liability for consequences of it excepted under
any term.
In this case the question is whether liability for loss through robbery as alleged
was expressly excluded premised on the email communication that the cargo
was transported at owner’s risk. Any ambiguity is to be construed in favour of
the party against whom it is to operate and general words of limitation will not
usually be construed so as to cover serious or fundamental breaches going to
the root of the contract. General words will have no application to liability for
negligence, but will prima facie be construed as to protect the defendant from
a strict form of liability (i.e. on warranty) In the case of White v John Warwick
Ltd (1953) 2 ALL ER 1021 the exemption clause relied on provided that
“Nothing in this agreement shall render the owners liable for any
personal injuries to the riders of the machines hired nor for any thirdparty claims, nor loss of any goods, belonging to the hirer, in the
machines.”
When the plaintiff was injured while riding the bike as a result of failure to
maintain the machine in good condition and a defect in the bike, Singleton LJ
said at 1025:
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