The main issues of this case is to discuss if Thomas is bound by the
exclusion clause imposed by Ultraclean. There are three issues to be
discussed in this case. The first being that pick up time for the clothes
changed to every five days from the guaranteed every three days, and
non of Thomas laundry was returned for two weeks, resulting in Thomas
having to purchase household item and clothing in an emergency basis.
The second issue being that Ultraclean using cheap soap powder instead
of certified "friendly to environment" and "skin safe" products, causing
Thomas' wife to develop skin rash. The third issue is the injuries, Thomas
suffered when Ultraclean van driver reversed into him in the driveway.
However, according the terms and conditions printed on the back of each
Ultraclean collection slip, Thomas will not be entitled to claim
compensation to the damages suffered. Hence, leading to the main issue
of whether these exclusion clauses are valid and if Thomas is bound by
them.
To discuss this issues, the definition of exclusion clause must be known.
Exclusion clause are the terms found in contract where the party inserting
them into the contract is seeking to exclude the liability specifically,
generally or limit the damages claimable from him. Furthermore, from
Taveechai Marine Case, we understand that exclusion clause can be
limited exclusion or it can be a complete action.
According to section 3 and 5 of the Civil Law Act 1957, reference have to
be to made to common law when there are no written law in Malaysia that
has dealt with the case and the law must be adoptable to the Malaysia
context. The Contracts Act 1950 deal with the exclusion clause
specifically. Therefore, the courts have to rely on English cases to adopt
the principles of control. From the common law, it states that there are
two rules in determining if the exclusion clause is valid, firstly the rule of
incorporation and the rule of interpretation.
Firstly, the rule of incorporation focuses on the timing of when the
exclusion clause is incorporated. It states that an exclusion clause is valid
only if it as incorporated before or at least at the same the contract is
formed.An example of exclusion clause was not valid is Olley v
Marlborough Court Ltd. In this case, exclusion clause was not valid
because payment was made at the lobby reception desk but the notice of
the terms were on the hotel room door. This does not satisfy the rule of
incorporation as Olley was only aware of the terms after she has paid,
which is after the contract was formed. A Malaysian case of the similar
characteristics is Dr Wong Wei Ping V Woon Lim Sin. In this case, the death
of the patient was caused by the negligence of the doctor. However, the
hospital and doc sought to rely on the clause made between doctor and
hospital which stated that the doctor would not be liable in negligence.
The court held that the hospital and doc could not rely on the clause as it
did not form part of the contract with the patient. Furthermore, the clause
were not bought to the attention of the patient. Hence, this case did not
satisfy the rule of incorporation, which makes the clauses invalid.
Moreover, the party wanting to use the exclusion clause must take
reasonable steps to bring it to the attention of the other party. There are
three methods that it can incorporated. Firstly, it has to be signed
document between the parties and the parties have mutual agreement on
the exclusion clauses when they sign the document. However, this is not
relevant to Thomas' case.The second method is through unsigned
documents. Receipts, tickets, notices and collection slips are examples of
unsigned document. This method is relevant to Thomas' case as the
exclusion clauses were incorporated to Thomas attention before and at
least at the time the contract was formed. Besides, the employees of
Ultraclean did not take reasonable steps to bring the exclusion clauses
that were printed at the back of the collection slip to Thomas' notice. As
collection slips are not contractual documents, unless reasonable steps
were taken because as for Thomas it was just a mere acknowledgement of
payment. Thomas did not know that the collection slips is a way to inform
him that there are terms in the collection slip.
The third method is through previous clause of dealings, also known as
virties of the past. This is also relevant to Thomas' case as Thomas has
been dealing with Ultraclean consistently for over a month, he should be
aware of the terms. Furthermore, Ultraclean did not change the terms
stated in the collection slip. Hence, the exclusion clause are valid.
The second rule in determining if an exclusion clause is valid is through
the rule of interpretation. This rule focus in the words used in the clauses.
The courts have developed certain rules to limit the effect if the exclusion
clause is seen to be ambiguous, vague and unclear. In such a case, the
clauses are to be interpreted in favour of the person receiving the
document containing the clauses. In other words, the clauses can be
interpreted against the party who inserted the clauses into the document.
This is because the party putting forward the clauses that may include
onerous terms that unfairly exclude liability.
There are 4 terms and condition printed on the back of the collection slip
which Ultraclean seeks to use as exclusion to the liability. The first clause
however, is vague and ambiguous. The words "accepts no liability...to
anyone.." can be interpreted that Ultraclean will not accept any
responsiblity if anything happens. This clause should not be valid as it is
an unfair term, allowing Ultraclean to be free from all liability if anything
were to happen. The third clause acts as a shield for Ultraclean on the
injury suffered by Thomas and his wife. As it is established that the first
clause is invalid, Ultraclean should not be able to escape from all liabilities
caused to others, the third clause should also be treated as invalid.
Furthermore, this can be supported by section 24 of the Contracts Act
1950 where it is stated that exclusion clauses which excludes injury on
others are to be considered as invalid.
The second clause allows Ultraclean to after pick up times without notice.
A similar case is the Malaysia Airlines v Matini Nathan case in this case,
the courts held that the conditions printed on the airline ticket can used to
allow Malaysia Airlines the flexibility to change flight schedule. In Thomas'
case, the second clause allows Ultraclean to alter pick up times without
notice. This clause only covers pick-up times but not the return time, as
pick up ans the return of clothes can be done at two different times. As
stated Ultraclean changed the pick-up time to every five days, but
Thomas did not receive his laundry for two weeks.
In conclusion, despite that the exclusion clauses were incorporated
through the third method of past dealings where Thomas has been dealing
with Ultraclean for a month, the exclusion clause are invalid as they did
not pass the second filter. As discussed in the above, the first, third and
fourth clauses are invalid as they are excluding responsibility for injuries
cause on Thomas and his wife, whereas the second clause is invalid in
Thomas case, it only covered pick up time but not the return time as the
issue in this case.
