Jodie was preparing to sell her rental property to cash in on the property boom that had occurred in

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Swinburne University of Technology *

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LAW10001

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Law

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Feb 20, 2024

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Jodie was preparing to sell her rental property to cash in on the property boom that had occurred in Melbourne recently. She realised that in order to gain maximum profit that she would need to do some minor renovations to the property before she placed it on the market. She approached Renos are Us Pty Ltd (‘Renos’), a renovation building company, to do the necessary renovation to her bathroom and kitchen area. Renos gave Jodie a quote for the work to be done and, at the bottom of the quote, in normal sized print in bright blue lettering, there appeared the following clause: Renos are Us Pty Ltd and its employees, agents and subcontractors will not under any circumstances be liable or responsible for any damage or loss that may be caused as a result of carrying out the renovations at the above-named property. Jodie was extremely busy at work and was preoccupied when she looked at the quote. She did not read the quote carefully and hence only glanced at this clause. She agreed to the quote and Renos to start work as soon as they could. The building work commenced and progressed quickly, much to the relief of Jodie. However, one night after returning home late, Jodie tripped over some PVC piping that had been left lying in the middle of the bathroom and fell onto a copper pipe sticking out of the wall (which had been left uncovered by Pete, the plumber (Renos’ subcontractor). Jodie suffered a serious injury as a result of this fall and has commenced an action for damages for her personal injuries (you may assume that Pete was negligent in leaving the pipe uncovered). Advise Jodie of her rights against Renos and Pete (the plumber). 1. Does the exclusion clause form part of the contract? - Found in a quote: unsigned document; Causer v Browne, a quote is considered a document that contains contractual terms forming the basis of a later contract Reasonable steps given of the existence of the term: print was normal size and a different colour to the rest of the document – Parker v South Eastern Railway/Mendelssohm v Normand; furthermore, Jodie did see it but didn’t bother to read it properly - The steps were taken before or when the contract was made: Thornton v Shoe Lane Parking 2. Does the exclusion clause cover what has occurred? - Exclusion clause construed according to its natural and ordinary meaning read in the light of the contract as a whole: Darlington Futures v Delco Australia - Clause will be construed strictly: Willis v Pratt - The clause is effective to exclude liability for negligence as the defendant “will not under any circumstances be liable… for any damage or loss”: White v Blackmore (‘howsoever caused’); DNFS Pty Ltd v De Neefe Signs Pty Ltd (‘all liability’). 3. If exclusion clause works, can Pete rely on it? - Would the inclusion of 3rd parties in the exemption clause (‘subcontractors’) allow Pete to rely on the exclusion clause? Renos as a 3rd party are ordinarily not able to take advantage of the benefit of the exemption clause: Wilson v Darling Island Stevedoring, unless Pete can satisfy the 4 requirements of Midland Silicones v Scruttons Ltd (which was confirmed by the High Court in Port Jackson Stevedoring v Salmond & Spraggon (Aust) Pty Ltd) – known as the ‘Himalaya clauses’. The net effect of ‘Himalaya clauses’ is to create a separate collateral contract between the main contracting party and the others, and as long as there is a clear intent to extend the benefit of the exclusion clause to the 3rd party: Life Savers v Frigmobile Pty Ltd. ChatGPT In advising Jodie regarding her rights against Renos and Pete, the plumber subcontracted by Renos, we need to examine three key legal questions based on the given information: 1. Does the exclusion clause form part of the contract?  Legal Principles : The legal principles applicable in determining whether an exclusion clause forms part of a contract include whether reasonable steps were taken to bring the clause to the attention of the other party before or at the time the contract was made (Thornton v Shoe Lane Parking). In Parker v South Eastern Railway and

Mendelssohn v Normand, it was established that the manner in which the clause is presented (e.g., size and color of print) can affect whether it is deemed to have been sufficiently brought to the party's attention.  Application : In Jodie's case, the exclusion clause was presented in normal-sized print and in a bright blue lettering at the bottom of the quote. Although Jodie only glanced at the clause, it was presented in a way that made it noticeable compared to the rest of the document. Following the principles from Causer v Browne, where a quote can contain contractual terms forming the basis of a later contract, the steps taken by Renos appear to meet the requirement of bringing the clause to Jodie's attention. Therefore, it is likely that the exclusion clause forms part of the contract. 2. Does the exclusion clause cover what has occurred?  Legal Principles : Exclusion clauses are construed according to their natural and ordinary meaning within the context of the contract as a whole (Darlington Futures v Delco Australia). Such clauses are strictly construed (Willis v Pratt), especially when they seek to exclude liability for negligence. A clause stating that the party "will not under any circumstances be liable… for any damage or loss" is generally effective in excluding liability for negligence, as seen in cases like White v Blackmore and DNFS Pty Ltd v De Neefe Signs Pty Ltd.  Application : Given the clause's broad wording, it ostensibly covers any damage or loss arising from the renovations, including personal injuries caused by negligence. However, Australian consumer law and common law have limitations on the enforceability of such clauses, especially when they contravene public policy or statutory consumer protections. 3. If the exclusion clause works, can Pete rely on it?  Legal Principles : For a third party like Pete to rely on an exclusion clause in the contract between Jodie and Renos, the clause must specifically extend its benefit to subcontractors (Himalaya clause). Following the criteria established in Midland Silicones v Scruttons Ltd and confirmed in Port Jackson Stevedoring v Salmond & Spraggon (Aust) Pty Ltd, there needs to be a clear intention to extend the benefit of the exclusion clause to the third party, effectively creating a collateral contract.  Application : The exclusion clause explicitly includes "employees, agents, and subcontractors", indicating a clear intent to extend the benefit of the clause to parties like Pete. Therefore, if the clause is valid and enforceable, Pete could potentially rely on it to exclude liability for the negligence resulting in Jodie's injury. Conclusion Jodie faces significant legal hurdles in pursuing a claim against Renos and Pete due to the presence and apparent applicability of the exclusion clause. However, the enforceability of such a clause, especially in the context of personal injury caused by negligence, may be subject to statutory limitations and judicial scrutiny to ensure it does not contravene public policy or statutory protections. Jodie should seek legal advice to explore all possible avenues, including potential claims under consumer protection laws that may override or limit the applicability of the exclusion clause.

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