#7298 - Express Terms Casebook Summary - Contracts 2

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 receipt for the money paid.

Issue (not vital): If it were to be assumed that the machine is a booking clerk in disguise, were the conditions on the ticket binding.

Decision: Not unless the ticket-holder knows that the ticket is issued subject to the condition, or the company did what was reasonably sufficient to give him notice of it.

Ratio (Lord Denning MR):

• Denning based these questions on the judgement of Mellish LJ in Parker v South Eastern Railway Co.

• Noting that counsel for S conceded that reasonable notice was not given T, Denning rejected that T ‘knew or believed that the writing contained conditions’ because the S failed to discharge their burden to prove it.

Order: Appeal dismissed

Megaw LJ thought it was extremely relevant in considering if proper steps were taken fairly to bring notice to T of the conditions, that the intended inclusion of conditions were undertaken when it was practically impossible for T to withdraw.

Sir Gordon Willmer distinguished cases where a ticket is proffered by a human hand and by a machine by the fact that there is no locus poenitentiae (opportunity to withdraw)

Balmain New Ferry Co Ltd v Robertson (1904) 4 CLR 379

Relevant Facts: The appellant company carried on business of a harbour steam ferry from Sydney to Balmain in connection with which they sued a wharf. Fares were only collected on the Sydney wharf. The company placed notices over the entrance to the wharf stating that 1 penny must be paid on entry and exit whether or not the person travels on a boat. Robertson paid the fare for entrance and went through the turnstile. Having missed the boat he attempted to leave the wharf. After refusing to pay a second penny the company’s officers attempted to detain him but he succeeded in forcing his way out through a gap beside the turnstile.

Case History: Robertson brought action against the appellant for assault and false imprisonment and was awarded 100 pounds. On appeal the supreme court granted a rule nisi for a new trial, nonsuit or verdict for the company. The rule was subsequently discharged with costs upon which the plaintiff appealed to the high court.

Issue: Could the company lawfully impose the 1 penny exit fee as a term of the contract

Decision: Yes, the plaintiff entered the land on his own free will with knowledge that the only means of exit was through the company’s turnstile, operated through the company’s system of collecting fares.

Ratio (O‘Conner J):

• The plaintiff’s assumption is that, after entry into the wharf, the plaintiff’s position was one of free right of access as to the public and that upon finding his exit barred he was entitled to squeeze past them or be allowed through. This depends on the terms on which he entered the wharf

• It should be remembered that the wharf was a place where the public had no free right of access and as such the company could impose terms on members of the public, as they saw fit, as conditions for entry on to the premises

• The terms of entry must be implied from the circumstances. Notice is immaterial. The plaintiff was aware of the only means of entry and exit having travelled on the company’s boats back and forth on many occasions.

• After rescinding the contract of carriage the plaintiff’s rights were no more than had he landed from a boat at the company wharf. He was on private property and not forced to be there, entering it of his own free will and of knowledge of the company’s system of collecting fares and thus his only means of exit.

• The company were lawfully entitled to impose that...