Australian Consumer Law: Exclusion Clauses

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Australian Consumer Law: Exclusion Clauses

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Australian Consumer Law: Exclusion Clauses

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Question:
Discuss about the Australian Consumer Law for Exclusion Clauses.

Answer:

Introduction
As far as the Australian Contract Law goes, it can be said that an exclusion clause becomes invalid in any contract if it extends its scope in such a way that it avoids liability for conduct beyond the scope of the contract in any way[1]. This has changed in several ways over the years. This concept shall be discussed in this paper taking into account two Australian Case law namely Sydney City Council v West and Thornton v Shoe Lane Parking Ltd. upon a discussion of the cases, the similarities and differences in the rulings shall be analyzed and a relation of these cases to the current Australian Legal System shall be established.

Sydney City Council v West
West arrived in a car park and was thereon given a ticket which contained a clause that disclaimed responsibility and was found to be worded too widely. It was also stated that unless the ticket is presented, the car shall not be allowed to be picked up. Subsequently, West’s car was stolen, and the Council relied on the exclusion clause to refrain from any liability that lay on them.
It was held that to establish the validity of an exclusion clause, one need to look into the matter of construction and analyze whether it fits into the contract overall or not. Windeyer J dismissed that there was no notion that there, in fact, existed any rule of law that would cease the operation of an exclusion clause about the fundamental breach of one question that relates to the interpretation of the exclusion clause. It should be noted that the High Court while deciding on the matter did not rule out the exclusion clause but because it was held to be a fundamental breach of law[3]. It was held that the appellant failed to take proper and necessary care because the exact way in which he should have delivered the car was not dined with them in reality and it thus amounted to an act of negligence on their part. Thus, the council in the matter was held liable for the loss that West had undergone.

Thornton v Shoe Lane Parking Ltd
P got a ticket from an automatic car park and the ticket stated that the conditions of parking on the inside of the park were to be taken under subjected conditions. Thereafter an accident took place and D was held to be not liable in the matter. The issue that arose was whether P was subject to the exemption clause or not. The law in this regard stated that a clause cannot be incorporated once a contract has been entered into and concluded. It is mandatory that all clauses should be brought about by either party in the contract before the offer is given and the acceptance is taken of the offer[5]. It has been held that if a condition has been brought to the notice of a person after the offer has been accepted by him, the it does not form a part of the contract and thus, a higher standard of reasonableness is brought in the matter which requires that whenever limiting the liability arises, then the limits should be brought to the notice of the concerned party before the contract is being concluded between the two[6].
Since in this case, the contract was concluded at the entrance only, it was held that no further conditions imposed by the contract could be held to be valid once the contract is being concluded. Alterations made by way of exclusion clauses at a later stage amounted to invalid terms and were held to be not successful ones.

Similarities and Differences in the Rulings
Taking into account the cases discussed above, it can be said that Courts have taken various different interpretations of the existence of exclusion clauses over time. The presence of an exclusion clause does not limit the liability in all instances and its interpretation should be done by the Courts taking into account all the merits and the demerits of the particular case in question[7]. In the rulings discussed above, it can be said that there were similarities between the two because the Courts did not consider that the mere presence of an exclusion clause is a valid ground to eliminate liability in all instances.
On the other hand, it can also be said that there are differences between the opinions expressed in the matter. While the former gave a clear view that an exclusion clause does not give unlimited exclusions to the benefiting party, the latter clearly gave a boundary on which an exclusion clause actually resides[8]. The case of West explained that the purview of an exclusion clause is not unlimited. On the other hand, the case of Thornton laid down the principle that an exclusion clause should not be considered to be applicable only because it is present in any contract. The presence of the same should be justified on identifiable ground and hence the application should be analyzed after making a thorough examination of the clause once it is invoked.
Relation to Current Australian Legal Position under Australian Consumer Law
As far as the law in Australia is concerned, exclusion clauses are dealt with under the Australian Consumer Law and Schedule 2 of the Competition and Consumer Act 2010, (Cth). It has been clearly stated by the law that an exclusion clause becomes effective only when it forms a part of the legally binding contract between the parties in concern[9]. At present, exclusion clauses become valid in any contract only if the party taking benefits under the same can prove beyond any reasonable doubt that the other party acceded to the terms of the exclusion clause and agreed to those conditions prior to conclusion of the contract[10]. This indicates that the law at present has been consistent on following the principle established by the case of Thornton.
The law also states that an exclusion clause cannot be used to derive undue and unlimited advantages in any situation. There have been instances where the High Court of Australia ruled that where the exclusion clause has been used by one party to derive undue benefits and put the other party in a disadvantageous position, the use as held to be against the scope of the clause and thus not allowed. This proves that the precedent developed in the case of Sydney City Council has been in practice ever since it was ruled in Australia.
The Australian Consumer Law thus can be said to be limiting the effectiveness of the application of exclusion clauses that are contained in any contract. The law at present has certain provisions that make it unfair, unconscionable harsh and oppressive to deal with terms of any contract. For instance, the law at present provides and extends protection for the consumers who are [provided with a standardized form of consumer contracts like for instance a contract entered into for the accumulation of goods or services that a personage corresponds to the moment he clicks an ‘I agree’ icon in any web page.
The law also provides all kinds of protection from unfair, unconscionable, harsh and oppressive terms under not only the Australian Consumer Law but also the Contracts Review Act 1980. The law states that those rights and remedies that are created by the ACL cannot be excluded and such terms if introduced are void[11]. Under Section 60 of the Act it has been provided that contracts for the supply of services to consumers come with an implied warranty and that cannot be breached. Similarly, under Section 64, it has been provided that the failure to return a registration card does not extinguish the statutory rights and exclusion clauses against such terms are invalid in the eyes of law[12]. Certain terms also remain in action for location in time period. It has been provided under Section 54 that even if there is a time bar on certain products, yet the rights of consumers shall continue to be in existence in case there are inherent defects in the goods[13]. Thus, it can be said that the ACL does not validate any unnecessary and undue terms that are included in any exclusion clause or contract.

Conclusion
It can be concluded from the above discussion that there have been changes in the validation and interpretation of exclusion clauses over a long tenure. However, the Australian Consumer Law at present has refined itself in such a way that no undue advantage is extended to the people in any contract and at the same time, the benefits are not taken away by the law as well. It has taken into account the various case laws that have shaped the interpretation of the exclusion clauses and thus, in this way, it has taken a form that is largely dependent on construction and harmonious interpretation of the law. The application of the case laws is being continued to be taken into account in the court cases.

References
Corones, S. G, The Australian Consumer Law (Thomson Reuters (Professional) Australia, 2011)
Miller, Russell V, Miller’s Australian Competition And Consumer Law Annotated (Thomson Reuters (Professional) Australia, 2011)
Turner, C. F, Australian Commercial Law (LBC Information Services, 2001)
McCann v Switzerland Insurance [2000] HCA
Norwest Refrigeration Services Pty Ltd v Bain Dawes (WA) Pty Ltd [1984] HCA
Rich v CGU Insurance Limited [2005] HCA
Sydney City Council v West (1965) 114 CLR
Thornton v Shoe Lane Parking Ltd (1971) 2 QB
Arts Law : Information Sheet : Disclaimers, Exclusion Clauses And Risk Warnings (2016) Arts Law
Exclusion And Limiting Terms | Free Contract Law Essay | Law Teacher (2016) Lawteacher.net
Exclusion Clauses – Stephen Wawn & Associates Sydney Legal Experts Will Disputes (2016) Stephen Wawn & Associates Sydney Legal Experts Will Disputes
Exclusion Clauses And The Australian Consumer Law (2016) Lawhandbook.sa.gov.au
Thornton V Shoe Lane Parking Ltd | Case Brief Summary (2016) Casebrief.me

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