Areas of applicable law: Contract law – Incorporation of a term – reasonable notice

Main arguments in this case: Exemption clauses and its incorporation in a contract

The fact of the case: Mr Parker left his luggage in a train station cloakroom. He paid the storage fee and was given a ticket for the bag he had deposited. The front of the ticket had information such as the opening times of the cloakroom and had words which read “See back”. On the back of the ticket the cloakroom had a notice which stated that in the event of any lost luggage while in the care of the cloakroom, the company would not pay out more than £10.

On his return the claimant found out that the luggage had been lost. The bag had contents that were worth over £24 and the company maintained that it was only obliged to pay £10 as per the exemption clause on the back of the ticket.

The Court of Appeal decided if reasonable steps were taken to point out the exemption clause to the claimant then claimant was deemed to have known of them. Since the front of the ticket did read “see back” and the back of the ticket did have limited liability, it was reasonable to believe that the claimant’s attention was drawn to the exemption clause and therefore the clause was incorporated in the contract. Hence the company was only liable to pay £10 as compensation.

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