Question

Hammer regularly took his car to be serviced at his local garage, Vanilla Ice Limited. On several occasions before handing his car over to the garage, Vanilla Ice always required Hammer to read and sign a contractual document which contained the following statement in big bold red type; “Vanilla Ice Ltd accepts no responsibility for any consequential loss or injury sustained as a result of any work carried out by the company, whether as a result of negligence or otherwise.”

On the most recent visit to the garage, Vanilla Ice was very busy when Hammer arrived and because of that fact Hammer was not asked to sign the usual document. He was however, given a receipt for his car, which he accepted without reading. Vanilla Ice’s usual business terms were printed on the back of the receipt in red, including the said contractual term stated above.

On his way home after servicing, Hammer was severely injured when the car suddenly burst into flames. It subsequently emerged that the fire had been as a result of the negligent work done by one of Vanilla Ice’s mechanic. Vanilla Ice has accepted that its mechanic was negligent, but denies any liability for Hammer’s injuries, relying on the exclusion clause above.

Advise Hammer on whether the exclusion clause was incorporated into his contract with Vanilla Ice Ltd, Using the IRAC method.

Answer 1

The exclusion clause in a contract is not enforceable when a party  disclaims the liability of injury of death as a result of negligence, liability for fraud or the strict liability, wherever it applies. Therefore it is not only illegal to put an exclusion clause disclaiming damages due to negligence, but also a criminal offence. The reason behind the unenforceability is that such exclusion clause, if legalised, makes the company immune for all kinds of negligence as well as intentional breaches committed due to whatever reasons, and therefore eliminate the need for all reasonable care to be taken to provide high standards of service. It would promote unscrupulousness among businesses, that would be grave injustice for the customers.

In this case, IRAC can be applied.

Issue - Whether the exclusion clause inserted by Vanila Ice in the contract is enforceable in a court of law.

Rule - It is illegal to disclaim the injuries /damages caused by negligence through an exclusion clause in a contract.

Application - Since the exclusion is deliberately meant to discliam the liability of own neglinece by Vanila Ice company, it can is not only illegal but a criminal offence.

Conclusion - The Vanila Ice company is liable for damages caused to the Hammer due to negligent work