Express Terms Casebook Summary Notes

Oceanic Sun Line Special Shipping Company v Fay (1988) 165 CLR 197

Relevant Facts: The plaintiff (F) made a booking in NSW for a cruise of the Greek islands on a vessel owned by the defendant Greek company (O). Upon payment, F was handed an ‘exchange order’ which would be exchanged for a ticket on boarding the vessel. In Athens, F collected his ticket when boarding the vessel. On it was printed the condition that the courts of Greece should have exclusive jurisdiction in any action against the owner. F received serious injuries while tarp shooting on the ship.

Case History: F sued in negligence in the NSWSC. O applied for a stay of the action. The application was refused by the trial judge; this decision was upheld by the court of appeal. The defendant appealed for special leave to the High Court.

Issue 1: Whether the contract was entered into when Mary Rossie Travel (F’s agent) paid F’s fare to JMA Tours (O’s agent) in Sydney

Decision: Yes, a contract of carriage was made upon payment on the basis of traditional contractual analysis.

Ratio (Denning LJ):

• This case can be distinguished from MacRobertson Airlines since the exemption on the exchange order was not so wide as to preclude the existence of any contractual obligation on the part of the defendant when it was issued. It contained promises of refund (if the cruise was cancelled) of exchange for a ticket (which appears to be a contractual entitlement)

• If it was intended that a contract was not to be made before issue of the ticket, no consideration needed to have moved from the defendant to support his right to board the vessel

• Therefore the proposition that no contract was made on issue of the exchange order must be rejected

Issue 2: Was the liability exemption clause included in the contract

Decision: No. First, the ticket is not to be regarded as an offer. Payment of the fare may be regarded as an option to acquire a ticket as a voucher of entitlement to be carried on terms already agreed. Secondly, if it is intended that the exemption clause was to be part of the contract, the carrier must have done all that was reasonably necessary to bring the exemption clause to the passenger’s notice.

Ratio (Denning LJ):

• Conventional analysis (of ticket cases) can’t be applied where the defendant is obliged to issue the ticket in exchange for an exchange order when a passenger is boarding the vehicle:

• The parties could not have intended the ticket to be a mere offer or that it could have contained further exemption clauses that the passenger was unaware when the original contract was made. Factors supporting this include:

  • Insufficiency of opportunity for the defendant to read and elect whether or not to accept the terms

  • The fact that the election may only be made after travelling to Greece and obtaining the ticket

• The better analysis is to regard the exchange for the ticket as performance of a contract of carriage – the defendant was not entitled to introduce new conditions by printing them on the ticket. The contract had already been made.

• The payment fare may hence be regarded as an option to acquire a certificate of entitlement to be carried on agreed terms.

• If an exemption clause is made to a party unaware that the term is to be included, the clause cannot be relied upon unless the carrier did “all that was reasonably necessary to bring the exemption clause to the passenger’s notice”

  • The exchange order mentions a ‘Sun Line passage contract’ but no particulars are given concerning the ‘foreign jurisdiction clause’. Hence this clause was not incorporated into the contract when the exchange order was issued.

Order: Appeal Dismissed

Thornton v Shoe Lane Parking Ltd [1971] 2 QB 163

Relevant Facts: The plaintiff (T) parked his motor car at an automatic car park owned by the defendant (S). He’d never gone there before. There was a notice on the outside headed ‘Shoe Lane Parking’ which gave the parking charges and at the bottom said ‘All Cars Parked at Owner’s Risk. T obtained his parking ticket from the machine which, as he drove in, dispensed it. T drove into the garage leaving his car there. On return to collect his car an accident occurred and T was severely injured.

Case History: The trial judge awarded T damages in respect of personal injury

Issue: Do the conditions on the ticket that stipulated the holder is bound by conditions displayed on the premise form part of the contract

Decision: No, the customer is not bound by the conditions on the ticket because it is given after the formation of the contract.

Ratio (Lord Denning MR):

• An important thing in this case is that the company seeks to exclude itself for liability to the car and for personal injury

• None of the previous ticket cases have an application to a ticket which is issued by an automatic machine. This is because on payment of the money, the customer is committed beyond recall and the contract already made.

• In the case of an automatic machine the offer is made by the proprietor holds the machine out ready to accept money. Acceptance occurs upon payment and receipt of the ticket. The ticket is no more than a...