THOMPSON V LMS RAILWAY ( 1930 ) 1 KB 41

1) FACTS

a) Thompson was unable to read and she travelled on a train with her daughter
and niece.
b) On the back of her ticket it was printed that the tickets were issued subject to
the terms outlined in the company’s time tables.
c) The time tables contained a clause purporting to exclude liability for any
injuries to passengers, howsoever caused.
d) Thompson slipped and sustained injuries as a result of the company’s
negligence, and claimed damages.

2) ISSUE

a) The company contended they had taken reasonable steps to bring the
exclusion clause to the attention of their customers, as the contract terms
were clearly referenced on the tickets.
b) They argued the taking of the ticket with the knowledge that terms and
conditions applied amount to an acceptance of those terms, and an agreement
to be bound by them.
c) Thompson contended she had not read the terms because she was unable to
read and the terms were difficult to obtain because they were contained
within a time table which customers had to purchase separately.
d) She also argued that the condition was unusual and, as such, special steps
should have been taken to draw it to her attention.

3) HELD

a) Thompson was unsuccessful in her claim. It was irrelevant that she was
unable to read.
b) The company had taken sufficient steps to bring the terms to customers’
attention in clear and legible print.
c) Accepting the ticket for travel constituted acceptance of the terms of travel,
and the reference to the time tables amounted to adequate notice of the
existence of the terms and of their contents.
 SANGGARALINGAM ARUMUGAM V WONG KOOK WAH ( 1987 ) 2 CLJ
255

1) FACTS

a) In this case, the A sent his car to the 2ndR’s workshopfor repairs. A notice at
the signboard stated “All vehicles stored or driven by our employees are at
owner’s risk. We accept no responsibility for loss & damage”.
b) While the car was driven by the first R(agent of 1stR) , car collided with
another vehicle and the A suffered personal injuries

2) HELD

a) Court held that the Respondent could not rely on EC as there was no
evidence to show Appellant knew of the notice /that his attention was drawn
to it by the R
 MALAYSIA AIRLINES SYSTEM V MALINI NATHAN ( 1995 ) 2 MLJ 100

1) FACTS

a) The respondents were booked and had confirmed tickets to fly on the
appellant’s airline on a scheduled date.
b) As the flight was fully booked, the appellant was unable to accommodate the
respondents on the said flight.
c) The respondents sued the appellant for damages and the appellant relied on
condition 9 of the conditions of contract printed on the airline ticket.
d) The said condition provided as follows: “Carrier undertakes to use its best
efforts to carry the passenger and baggage with reasonable dispatch. Times
shown in timetables or elsewhere are not guaranteed and form no part of this
contract…Schedules are subject to change without notice”

2) HELD

a) The former Supreme Court held that the appellant was entitled to rely on the
said connection and was thus not in breach of contract for failing to fly the
respondents from London to Kuala Lumpur on the appellant’s airline.
 INTERFOTO PICTURE LIBRARY V STILETTO VISUAL PROGRAMMES
( 1989 )

1) FACTS

a) Stiletto Visual Programmes (SVP) ordered 47 photographic transparencies

from Interfoto Picture Library (IPL).
b) On the delivery note was a clause stating that transparencies should be
returned within 14 days of delivery.
c) If they were not so returned, a holding fee of £5 per transparency per day
would be charged.
d) SVP returned the transparencies four weeks later and received a bill for over
£3,700. SVP refused to pay and IPL successfully received judgement for
payment. SVP appealed.

2) ISSUE

a) SVP contended they had never dealt with IPL before, were unaware of their
standard conditions and they had not been sent a copy of their conditions
prior to their having returned the transparencies.
b) Even if they had been sent a copy of the terms, IPL had not taken sufficient
steps to communicate their onerous terms, namely, that the fees were more
than ten times higher than other lending libraries.
c) SVP argued the contract was formed when they requested the transparencies,
and IPL agreed to send them. IPL argued the delivery note was included with
the transparencies and was clear and unambiguous in its terms and,
accordingly, they could rely on the clause and claim the funds due.
d) They claimed the contract was formed when SVP took delivery of the
transparencies.

3) HELD

a) The clause had not been successfully incorporated into the contract.
b) Where a clause is particularly onerous, as in this case, and the fees are
exorbitant at ten times the level of other photographic libraries, the party
seeking to rely on the clause must show they have taken reasonable steps to
bring the clause to the other party’s attention.
c) IPL had failed to do this and they could, therefore, only recover fees assessed
on a quantum meruit basis.
 SPURLING LTD V BRADSHAW ( 1956 ) 1 WLR 461

1) FACTS

a) Bradshaw sent eight barrels of orange juice to be stored at Spurling’s

warehouse.
b) Spurling sent a receipt to Bradshaw on which were printed their conditions of
storage.
c) The conditions contained a clause purporting to exclude liability for any
losses resulting from their negligence.
d) Bradshaw fell into arrears with his storage payments and Spurling brought an
action to recover the monies due. The orange juice was spoiled and unusable,
and Bradshaw counterclaimed in negligence.

2) ISSUE

a) Bradshaw alleged Spurling were negligent, and in breach of an implied term

to take reasonable care of the barrels because they had left them in the open
air and the orange juice had spoiled.
b) He further contended he had not been given sufficient notice of the
exemption clause and, therefore, Spurling should not be able to rely on it.
Spurling denied negligence and argued they could rely on the exemption
clause even if they had been negligent.
c) The clause had been brought to the attention of Bradshaw and was clear and
unambiguous in its meaning.

3) HELD

a) Although it had not been proven that Spurling had been negligent, even if
they had been negligent, they would be able to rely on the exclusion clause to
avoid liability.
b) Sufficient notice of the clause had been given so as to make it a term of the
contract.
c) Exemption clauses will operate to protect a party only where he is carrying
out his contract and not where he is deviating from it in a fundamental
respect.
 RICHARDSON, SPENCE V ROWNTREE ( 1894 ) 5 CPD 1

1) FACTS

a) The House of Lords applied the approach outlined earlier in Parker. The
plaintiff was a passenger on a steamer travelling from Liverpool to
Philadelphia.
b) The plaintiff was given a folded ticket, no writing being visible in this form.
c) The ticket, when opened had a great many conditions, one of which limited
liability for personal injury or loss of baggage to $100.
d) The plaintiff never read the ticket. The plaintiff was injured whilst on the
vessel.

2) ISSUE

a) At first instance Bruce J left three questions to the jury:

i. Did the plaintiff know that there was writing on the ticket? This question
was answered in the affirmative.
ii. Did the plaintiff know the writing contained conditions relative to the
contract of carriage? This was answered in the negative.
iii. Did the defendants do what was reasonably sufficient to give the
plaintiff notice of these conditions? This question was answered the
negative.

3) HELD

a) The High Court, Court of Appeal and House of Lords held that in the light of
these findings the limitation clause was not available to the defendant.
 MCCUTCHEON V DAVID MAC BRAYNE ( 1964 ) 1 WLR 461

1) FACTS

a) McCutheon delivered his car to the defendant shipping company for carriage
from the Hebrides to the mainland.
b) The car was destroyed when the ship sank because of the company’s
negligence.
c) The company’s usual practice was to issue a risk note to customers
exempting them from liability for losses resulting from their negligence.
d) McCutheon had signed such notes on previous occasions but had never read
the terms. On this occasion, no such risk note was supplied, and McCutheon
sought to recover the value of his car.

2) ISSUE

a) The company maintained the exclusion clause referred to in the risk note was
incorporated into the oral contract because of the parties’ previous course of
dealing.
b) They argued the conditions of carriage were prominently displayed on
notices at their offices and as McCutheon had signed such risk notes before,
he should be deemed to have knowledge of them.
c) McCutheon contended he had never read the terms on the previous occasions
he had transacted with the defendants.
d) He contended the clause could not be relied upon because it had not been
successfully imported in to the instant oral contract.

3) HELD

a) McCutheon was successful in his claim. The clause had not been
successfully incorporated into the contract.
b) McCutheon could not be bound by a clause on the basis of a previous course
of dealing when he did not have knowledge of the specific term.
c) Previous dealings are only capable of importing a term into a later contract
where actual or constructive knowledge of the terms is established, and the
parties assent to them.
 HOLLIER V RAMBLER MOTORS ( 1972 ) 2 QB 71

1) FACTS

a) Hollier had his car repaired by the defendant garage three or four times over
a period of five years.
b) On at least two of these occasions he had signed a form which stated the
garage were exempted from liability for damage caused by fire on their
premises.
c) Hollier had not read the form.
d) On this occasion there was an oral agreement for the repairs to be conducted,
and Hollier had not signed a form.
e) His car was damaged by fire and Hollier claimed in negligence.

2) ISSUE

a) Hollier claimed the garage had been negligent and in breach of the implied
term that they would take reasonable care of his car.
b) He also contended the garage could not rely on the exclusion clause because
it could not be imported from previous written contracts into the oral contract
made between himself and the garage.
c) The garage sought to rely on the exemption clause on the basis that the term
had been imported into the oral contract by virtue of the parties’ previous
course of dealing.
d) They argued three or four occasions within five years was sufficient to
amount to a course of dealing such that the terms of the previous contract
would be imported into the oral one, and, therefore they were exempted from
liability.

3) HELD

a) Hollier was successful in his claim.

b) Three or four occasions in five years was insufficient to amount to a course
of dealing and the exclusion clause had not, therefore, been imported into the
oral contract.
c) Even if the clause had been so imported, the language used was not so plain
as to clearly exclude the garage from liability for its own negligence.
 HARDWICK GAME FARM V SUFFOLK AGRICULTURAL POULTRY
PRODUCERS ASSOCIATION ( 1969 )

1) FACTS

a) Hardwick Game Farm (HGF) purchased compounded meals from Suffolk

Agricultural Poultry Producers Association (SAPPA) to feed their pheasants.
Many of the birds died because the feed contained toxins.
b) SAPPA had purchased the supplies from two wholesalers under oral
contracts.
c) Their normal course of dealing was evidenced by sales notes containing a
clause stating the buyer bore responsibility for latent defects.
d) The wholesalers had purchased the supplies from two parties on their
standard terms, which purported to exclude liability for latent defects. HGF
recovered damages from SAPPA.
e) SAPPA sought indemnity from their suppliers, who in turn sought indemnity
from theirs.

2) ISSUE

a) SAPPA argued their supplier was liable for breach of the implied term of s14
Sale of Goods Act 1893 and the implied warranty of s2(2) Fertilisers and
Feeding Stuffs Act 1926 that the goods were fit for the purpose for which
they were supplied.
b) They contended these implied statutory obligations could not be excluded.
c) The third parties sought to rely on the clauses which, they claimed, absolved
them for liability for latent defects.
d) They argued pheasants were not poultry under the 1926 Act and so the
statute did not apply.
e) The third parties in turn sought an indemnity from their supplier, repeating
SAPPA’s allegations regarding breach of the implied statutory terms.

3) HELD

a) SAPPA recovered damages. Where goods are supplied for a particular

purpose, the statutory obligations apply and cannot be excluded in the
contract.
b) Membership of the same trade association was insufficient to rebut the
presumption that buyers may rely on the skill of sellers in warranting goods
are of merchantable quality.
c) Although pheasants were not poultry for the purposes of the 1926 Act, the
warranty still applied and damages were recoverable for harm suffered to
pheasants.
 BRITISH CRANE HIRE V IPSWICH PLANT HIRE ( 1974 ) QB 303

1) FACTS

a) Ipswich Plant Hire (IPH) arranged by telephone to hire a crane from British
Crane Hire Corporation (BCHC).
b) The crane was duly delivered, and subsequently BCHC sent their conditions
of hire to IPH.
c) The conditions included a clause stipulating that IPH would be responsible
for, and indemnify BCHC for, any costs arising out of the use of the crane.
d) IPH did not sign or return the form to BCHC and when the crane sank into
the marshes, they refused to indemnify BCHC for the cost of recovering it.

2) ISSUE

a) IPH contended the clause requiring them to indemnify BCHC had not been
successfully incorporated into the contract because the conditions of hire had
not been supplied until after the contract had been formed.
b) They argued the contract was formed orally over the telephone and BCHC
could not, therefore, seek to incorporate terms into the agreement after the
crane had been delivered.
c) IPH also relied on their failure to sign and return the form as evidence that
these additional terms had not been agreed. BCHC argued IPH had hired
cranes from them on previous occasions and were aware of their conditions
of hire and, as such, these conditions were effectively incorporated into the
contract.
d) They also contended such conditions were the industry norm and, therefore,
it was not incumbent upon them to draw special attention to the clause.

3) HELD

a) BCHC were successful and the clause was deemed to be incorporated into
the contract.
b) Where parties are of equal commercial bargaining power, the conditions
usually contained within industry contracts would be successfully
incorporated based on the common understanding of the parties.
c) BCHC could, therefore, recover the costs of recovering the crane.

MESSRS YOUNG AND CO V WEE HOOD TECK DEVELOPMENT CORP

 ( 1983 )

1) FACTS

a) A retainer had come into existence between the (R) and (A)solicitors based
partly upon the conduct of the parties whichshowed a course of dealing
which give rise to legal obligations andestablishing the relationship of
solicitor and client.
b) The (A) hadwritten to the ® offering their services & had prepared the
(R)s’articles of association.
c) They had also sent bills and receiptsrelating to other transactions to (R) who
made payment for them.

2) HELD

a) The exemption clause could not be incorporated into the contract

POPULAR INDUSTRIES LTD V EASTERN GARMENT MANUFACTURING

 SDN BHD ( 1989 ) 3 MLJ 360

1) FACTS

a) P sued D for damages for non-delivery of goods alleging loss of profits of

resale. P were in the business of importing garments from suppliers in
various countries including Malaysia. P’s registered office was in Canada
while that of D was in Penang.
b) In their statement of claim, P alleged that at all material times D knew that P
bought the goods in the ordinary course of their business for resale at a profit
to its customer and that in breach of the said contracts, D wrongfully failed to
deliver the goods as agreed.
c) It was also alleged that P were unable to purchase similar goods on the
market and therefore unable to supply their customers and so lost the profits
they would have made on the resale of the goods.
d) By their defence, D contended that there never was any concluded contract
and that even if there were concluded contracts, D were discharged from
performing their part of the contracts by reason of the failure of P to provide
any letter of credit.

2) HELD

a) Held, awarding P nominal damages

b) In the instant case, the primary defence of D that there was no concluded
contract because in the case of each of the contracts sued on letters of credit
had not been opened sixty days before shipment, was unsustainable having
regard to the previous course of dealings between the parties. There was also
no evidence to show that the parties had entered into a new arrangement
which materially altered the previous course of dealings between them. The
court found that D had breached their contractual obligations to furnish the
shipping dates to P and that until and unless D discharged that obligation, P
were under no obligation to open the letters of credit. The court, accordingly,
held that D were liable for damages for breach of contract
c) In the instant case, P had the burden of proving both the fact and the amount
of damages before they could recover
d) It is a firmly established rule that when documentary evidence is tendered,
primary evidence of the document, that is, the production of the documents
themselves, is essential. In the instant case, the statement containing the
estimated losses suffered by P which was alleged to be extracted from the
books of account of P, which were never produced, was inadmissible in
evidence
e) In all the circumstances, although P had shown the fact of damage, no
evidence or no sufficient evidence had been adduced as to its amount. The
court accordingly awarded P nominal damages of US[dollar]500, that being
the currency of the contract.

AILSA CRAIG FISHING CO V MALVERN FISHING CO

1) FACTS

a) The claimant kept their vessels in a harbour, which was guarded under an
agreement requiring the defendant to protect the vessels in the harbour,
including the claimant’s vessels.
b) Due to negligence on the part of the defendant, one of the claimant’s vessels
was hit by another and subsequently sunk.
c) The relevant agreement covering the security services rendered also included
a clause which capped the potential liability of the defendant at £1000 per
claim or £12 000 per anum, unless the damage being claimed for was caused
by theft or by fire.
d) This included negligence or breach of contract.

2) ISSUE

a) The issue in this case was the validity of the clause in question to limit
damage, particularly in cases of negligence and near total breach of contract
as was the case here (since the defendant failed to perform their part of the
contract).

3) HELD

a) The court held that the clause was not an exclusion clause but a limitation
clause and that it was valid.
b) It was observed that the courts are less hostile to such clauses than they are to
exclusion clauses, and therefore make less effort to interpret them in ways
which strain the language of the clause in order to achieve a measure of
justice.
c) “One must not strive to create ambiguities by strained construction, as I think
the appellants have striven to do. The relevant words must be given, if
possible, their natural, plain meaning. Clauses of limitation are not regarded
by the courts with the same hostility as clauses of exclusion.” (Lord
Wilberforce)

BALDRY V MARSHALL ( 1925 ) 1 KB 260

1) FACTS

a) The plaintiff asked the defendants, who were motor dealers, to supply a car
that would be suitable for touring purposes.
b) The defendants recommended a Bugatti, which the plaintiff bought.
c) The written contract excluded the defendant’s liability for any “guarantee or
warranty, statutory or otherwise”.
d) The car turned out to be unsuitable for the plaintiff’s purposes, so he rejected
it and sued to recover what he had paid.

2) HELD

a) The Court of Appeal held that the requirement that the car be suitable for
touring was a condition.
b) Since the clause did not exclude liability for breach of a condition, the
plaintiff was not bound by it.

HOUGHTON V TRAFALGAR INSURANCE ( 1954 ) 1 QB 247

1) FACTS

a) The claimant and the defendant had entered into an insurance contract (with
the defendant being the insurer).
b) The contract included an exemption clause, which stipulated that the
Defendant was not liable to pay out where the claimant’s vehicle had an
excess load at the time of an accident.
c) The specific wording of the exemption clause was that coverage was
excluded for “loss, damage and or liability caused or arising whilst the car is
conveying any load in excess of that for which it was constructed”.
d) The Claimant suffered a car accident and attempted to claim on his policy. At
the time of the accident there were 6 people in the vehicle. The vehicle was
designed to seat only 5. 

2) ISSUE

a) The issue in the case was the meaning of the word “load” in the exclusion
clause and if it could apply to carrying too many passengers.

3) HELD

a) It was held that the meaning was ambiguous and that in such cases the
meaning would be interpreted in the interests of the insured, in other words –
contra proferentem.
b) “If there is any ambiguity, it is the company’s clause and the ambiguity
would be resolved in favour of the assured” (Somervell LJ)
c) Therefore, it was held that the word load did not apply to passengers and that
the Defendant could not avoid paying out on the policy. The court grounded
its approach in a reluctance to allow the application of (and arguably
proliferation of) exclusion clauses, which seek to exclude liability in a vague
and far reaching manner.

WHITE V JOHN WARWICK ( 1953 ) 1 WLR 1285

1) FACTS

a) The plaintiff hired a trademan’s cycle from the defendants. The written
agreement stated that “Nothing in this agreement shall render the owners
liable for any personal injury”.
b) While the plaintiff was riding the cycle, the saddle tilted forward and he was
injured.
c) The defendants might have been liable in tort (for negligence) as well as in
contract. 

2) HELD

a) The Court of Appeal held that the ambiguous wording out of the exclusion
clause would effectively protect the defendants from their strict contractual
liability, but it would not exempt them from liability in negligence.

CHIN HOOI CHAN V COMPREHENSIVE AUTO RESTORATION SERVICE

 ( 1995 ) 2 MLJ 100

1) FACTS

a) The appellant had, on payment of RM295 to the respondents, agreed to have

his car waxed and polished by them. He left his car at the respondents’
premises in the basement of the Sungai Wang Plaza Complex and was given
a receipt (‘the receipt’) with which to claim for the car.
b) When the appellant returned to collect his car from the respondents, he found
that it had been damaged while being driven by an employee of the second
respondent to a lower floor of the basement.
c) The appellant sued the respondents for the costs of repairing the car at
RM3,630.85; costs of hiring another car for one month at RM1,790;
25[percnt] depreciation in the value of the car at RM9,128.81; and costs of
engaging an independent adjuster at RM169.
d) The suit was dismissed with costs after a full trial in the magistrates’ court on
the ground that an exemption clause at the back of the receipt which stated
that the respondents were ‘not liable for any loss or damage whatsoever of or
to the vehicle, its accessories or contents. Vehicle and goods are at owner’s
risk’ exonerated the respondents.
e) The appellant appealed. At the appeal, the respondents raised the objection
that relevant documents relating to the appellant’s claims, eg the receipt for
the costs of repairs (‘the repair receipt’) and the appellant’s credit card
receipt, were only marked for identification and not as exhibits.
f) The makers were not called, thereby denying the respondents of the
opportunity to cross-examine them.

2) HELD

a) Held, allowing the appeal with costs:

b) It is settled law that an exemption clause however wide and general does not
exonerate the respondents from the burden of proving that the damage caused
to the car were not due to their negligence and misconduct. They must show
that they had exercised due diligence and care in the handling of the car.
c) In this instance, the respondents had not adduced any evidence to show that
they had exercised due care and diligence when handling the appellant's car.
On the contrary, there was ample evidence to show that the respondents had
been negligent when their employee had involved the car in an accident
while driving it to a different floor of the basement car park. On this
conclusion, the appeal must be allowed.
d) Although the maker of the repair receipt was not called, this should not have
prevented the magistrate from marking it as an exhibit, particularly when the
appellant had produced a copy of his credit card receipt to show that he did
make such payment. The receipt for the rental of another car too could easily
have been marked as an exhibit.
e) The court allowed the costs of repairs at RM3,630.85; costs of hiring another
car for one month at RM1,790; and costs of engaging an adjuster at RM169.
However, the claim for depreciation at 25% was disallowed as there was no
evidence to support such a rate of depreciation. Depreciation occurs
regardless of whether there has been an accident or not, the only difference
 being the rate of depreciation which in this case was not proved. Interest on
all sums allowed was awarded at 8%pa from the date of damage to date of
payment.

JACKSON’S MALAYA BHD V PENANG PORT COMMISSION ( 1973 ) 2

 MLJ

1) FACTS

a) The plaintiffs sued the defendant for breach of contract of bailment in respect
of one carton of merchandise in the sum of $3,442.97.
b) Loss of the carton was admitted by the defendant but it was argued that the
defendant's liability was limited to $1,000, as provided in
the Penang Port Commission By-laws.

2) HELD

a) There was no implied term in this case in regard to the limitation of liability;
b) By-law 79 of the Penang fort Commission By-laws 1957 was ultra vires the
powers given by the Penang Port Commission Ordinance, 1955 and was
therefore void; the defendants were therefore liable for the full value of the
articles lost.

PORT SWETTENHEM AUTHORITY V T.W. WU AND COMPANY ( 1978 ) 2

MLJ 137
1) FACTS

a) The facts in this case were that 93 cases of pharmaceutical goods had been
unloaded at Port Klang and kept in the custody of the Port Authority (the
appellants).
b) Subsequently only 29 cases were collected by the respondents and some of
the contents of the missing cases were recovered in shops in Kuala Lumpur.
c) The respondents brought an action against the appellants for breach of
contract and/or conversion of the remaining 64 cases.
d) The learned trial judge (Abdul Hamid J., [1975] 1 MLJ 15) found that the
onus lay on the appellants to prove that the goods had not been lost because
of their negligence or misconduct or that of their servants, and that they had
failed to discharge that onus.
e) Accordingly he gave judgment for the respondents. The appellants' appeal to
the Federal Court was dismissed ( [1975] 2 MLJ 73).The appellants
appealed.

2) HELD

a) The onus is upon the appellants under sections 104 and 105 of the Contract
Act to prove that they had taken as much care of the respondents' goods as
a Port Authority of ordinary prudence would under similar circumstances
have taken of its own goods of the same bulk quality and value as the 64 lost
cases;
b) If there is nothing in the provisions of the Contract Act to establish with
certainty whether the onus is upon the bailor to prove the default or upon the
bailee to disprove it, those provisions must be interpreted in the light of the
common law;
c) At common law the onus is always upon the bailee, whether he be a bailee
for reward or a gratuitous bailee, to prove that the loss of any goods bailed to
him was not caused by any fault of his or of any of his servants or agents to
whom he has entrusted the goods for safe keeping. Accordingly the onus of
proving that the loss of the goods deposited with the appellants in this case,
was not caused by the negligence or misconduct of their servants, lay on the
appellants;
d) The appellants in this case have failed to discharge the onus which lay upon
them;
e) By-law 91(1) of the Port Swettenham Authority By-laws, 1965 is invalid as it
is ultra viressection 29(1)(g) of the Port Authorities Act, 1963, in so far as it
purported to limit the Port Authority's liability in respect of a loss occurring
with the actual fault or privity of the Authority; and also because it did not
only limit but wholly excluded the liability of the Port Authority for the loss
of any goods caused by their own misconduct or negligence.

SEKAWAN GUARDS SDN BHD V THONG GUAN SDN BHD ( 1995 ) 1 MLJ
811
1) FACTS

a) By a contract in writing ('the contract'), the appellant ('Sekawan') agreed to

provide security services at the premises of the respondent ('Thong Guan'). A
theft occurred at the premises, resulting in the loss of Thong Guan's goods. 
b) Thong Guan sued Sekawan for breach of contract and, alternatively,
negligence. 
c) Sekawan relied on an exemption clause in the contract which provided that it
was not liable for any loss suffered by Thong Guan unless the loss was solely
caused by the negligence of Sekawan's employee. Sekawan argued that the
loss was in fact caused by the negligence of Thong Guan's own guard, who
was not at the premises on the night in question although he was on duty. 
d) Sekawan, however, did not adduce any evidence to prove
that Thong Guan's guard was negligent.
e) The sessions court judge disregarded both the issues of the exemption clause
and negligence of Thong Guan's guard on the ground that they were not
pleaded in Sekawan's statement of defence, and allowed Thong Guan's
claim. Sekawan appealed.

2) HELD

a) Held, dismissing the appeal:

b) As the issues of the exemption clause and the negligence of Thong Guan's
employee were not pleaded in Sekawan's statement of defence, the sessions
court judge was correct in disregarding them. Neither could Sekawan now
raise the issues on appeal.
c) Thong Guan's claim was made under the contract and, therefore, the position
of its employee could not in any way affect the contractual duty of Sekawan.
The contract made no reference that there would be other guards on duty and
hence, Thong Guan had no obligation under the contract to provide
other guards.
d) From the facts, the theft could not have been a quiet affair and the stolen
items could only have been taken away in either two or three lorries over a
period of 11ú2 hours if three persons were involved. There was also noise
caused by the opening and closing of the metal sliding door. The guard was
to remain awake all the time and could not have missed hearing the noise but
failed to take the necessary action.

UNITED OVERSEAS BANK ( MALAYSIA ) BHD V LEE YAW LIN & ORS
( 2016 ) 4 CLJ 871
1) FACTS

a) United Overseas Bank (the “Bank”), entered into an agreement with Lee
Yaw Lin and her hus-band (“Yaw Lin”)to let/rent out a safe deposit box in
the bank’s Medan Pasar branch.
b) Yaw Lin were the joint hirers of the safe deposit box for the services of
which they paid a sum of RM400 per year.
c) In the agreement signed between the Bank and Yaw Lin, an exclusion clause
and limitation of liability clause were added.
d) Clause 13 of the Agreement provided for an exclusion clause which
expressly negates all respon-sibility and liability on part of the Bank to Yaw
Lin. Clause 14 of the Agreement provides on limi-tation of liability.
e) On 19 October 2012, it transpired that the vault where the safe deposit boxes
were placed was broken into and burglarized.
f) Upon inspection of the safety box, Yaw Lin found that it was not damaged
but all the documents in it were gone.
g) Yaw Lin was instructed by the Bank to provide a statutory declaration, proof
of loss and lodge a police report.
h) Yaw Lin did not provide a statutory declaration or proof of loss but made a
claim with an inven-tory for the valuable lost with an estimate value of RM1,
480,514.
i) Yaw Lin brought a claim for fraud and/or negligence against the bank, and
alleged that the break-in of the safety box was an ‘inside job’.
j) The High Court found in favour of Yaw Lin, hence the present appeal by the
Bank.
k) The primary question is the EFFECT of the exclusion clause and the
limitation liability clause in the bank’s rental agreement with Yaw Lin for the
hire of a safety deposit box.

2) HELD

a) Appeal allowed
b) Yaw Lin is assumed to have understood and agreed to all the terms in the
hire contract when they had executed it.
c) It is wrong for the court to conclude that despite having signed the contract in
its entirety, the parties can now contend that specific clauses are not
enforceable.
d) In fact, the function of the bank in relation to the safety box is only to afford
its customers a de-gree of privacy to store its valuables in exchange for a
very modest sum of money.
e) Therefore, the amount charged in no way matches the value of the contents
of the safety box, as the bank has no knowledge of the contents of each
safety box.
f) The bank here was therefore like insurers without the sizeable premium
normally levied by in-surers.
g) As the valuables are stored for a relatively modest sum, it is not unlawful for
the bank to seek to limit its liability in the event of burglary, theft or events
beyond their control.
h) The High Court judge has thus erred in holding that the exclusion clause and
the liability clause were inapplicable.
 i) The appeal by the Bank is allowed.

CIMB BANK BERHAD V ANTHONY LAWRENCE BURKE & ANOR ( 2019 )

2 CLJ 1

1) FACTS
 a) The respondents took a loan from the appellant to buy a property in
Malaysia. As the property was still under construction, the appellant was
contractually bound to make progressive payments to the developer as per
the stage of completion of the construction on receiving an invoice to that
effect from the developer.
b) The appellant failed to make one such progress payment for about a year
causing the developer to terminate its sale and purchase agreement (‘SPA’)
with the respondents. The respondents sued the appellant for general, special,
exemplary and/or aggravated damages for breach of contract and/or
negligence and breach of fiduciary duty. The High Court dismissed the claim
on the ground that cl 12 of the loan agreement absolved the appellant of any
liability. Essentially, cl 12 provided that the appellant would not be liable to
pay the respondents for any ‘loss of income or profit or savings, or any
indirect, incidental, consequential, exemplary, punitive or special damages’
that they might incur.
c) On the respondents’ appeal, the Court of Appeal (‘COA’) set aside the High
Court’s decision and held that:
i. The appellant had breached a fundamental term of the loan
agreement in failing to pay the progress payment and had also
breached its duty of care to the respondents by causing the SPA to
be terminated and the respondents to suffer loss and damage; and
ii. Since cl 12 effectively barred the respondents from initiating any
form of legal proceedings to enforce their rights, it was void under s
29 of the Contracts Act 1950 (‘the CA’).
d) The appellant was granted leave to file the instant appeal against the COA’s
decision on the question whether s 29 of the CA could invalidate an
exclusion clause which not only exonerated a contract-breaker of liability for
breach of contract but also of liability to pay compensation for failing to
perform the contract.
e) At the appeal hearing, the appellant argued that the parties had agreed to
include cl 12 in the loan agreement and that since cl 12 did not expressly
prohibit the respondents from filing any legal proceedings nor did it oust the
jurisdiction of the court, it did not offend s 29 of the CA.
f) The respondents, on the other hand, submitted that by barring the recovery of
any form of damages, cl 12 effectively rendered futile any legal action by the
respondents against the appellant for breach of the loan agreement.
g) The respondents also said cl 12 should be held invalid for offending public
policy as it absolved the appellant of any liability even if it was wholly
responsible for breaking the contract.

2) HELD

a) Held, dismissing the appeal and answering the leave question in the
affirmative:
b) The COA was right in holding that a right could not be dissociated from the
 remedy and as was clearly demonstrated in the instant appeal, where despite
the finding that there was a breach by the appellant, if cl 12 of the loan
agreement was allowed, it would be an exercise in futility for the respondents
to file any suit against the appellant. The respondents were precluded from
claiming the remedies against the appellant. Clause 12 negated the rights of
the respondents to sue for damages, and the kind of damages spelt out in cl
12 encompassed and covered all forms of damages under a suit for breach of
contract or negligence. There was an absolute restriction. Section 29 of the
Contracts Act 1950 prohibited such restriction (see para 37).
c) The pertinent question was whether the respondents were absolutely
restricted from enforcing their rights under or in respect of the contract.
Clause 12 precluded the respondents from claiming any loss or damage and
the appellant was not liable for any amount for loss of income or profit or
savings or any indirect, incidental, consequential, exemplary, punitive or
special damages suffered by the respondents. In para 21 of their statement of
claim, the respondents claimed for, inter alia, special damages (including the
total amount of loan payments they had paid to the appellant; the total losses
they suffered due to the termination of the SPA and other costs and expenses
incurred due to the breach) as well as general damages and aggravated and/or
exemplary damages. If the respondents were precluded from claiming the
remedies they sought under para 21, what could they claim against the
appellant? Were they not totally restricted from enforcing their rights in
respect of the contract? On the plain meaning of the words used in cl 12,
whatever the respondents were claiming had been negated and as such s 29
of the Contracts Act 1950 ought to be invoked .
d) The instant case merited the application of the principle of public policy.
There was patent unfairness and injustice to the respondents if cl 12 was
allowed to deny their claim/rights against the appellant. It was
unconscionable on the appellant’s part to seek refuge behind cl 12 and it was
an abuse of the freedom of contract. Freedom of contract implied some
choice or room for bargaining. The respondents had none. The right of access
to the courts was always jealously guarded by the common law and the
general principle remained that contracts which sought to oust the
jurisdiction of the courts were invalid (see paras 66-68).
e) The statement of law and the principle as stated by the Supreme Court
in New Zealand Insurance Co Ltd v Ong Choon Lin (t/a Syarikat Federal
Motor Trading) [1992] 1 MLJ 185 was a correct statement of law on the
efficacy of exclusion clauses under s 29 of the Contracts Act 1950. That case
held that a right could not be dissociated from its remedy and the legal
distinction that was made in Indian decisions between the existence of a right
and its remedy in the context of the consequences that flowed therefrom did
not exist in Malaysian law which regarded such distinction as merely
semantic