The Gazette 1981

GAZETTE

JULY-AUGUST 1981

generally be told that he could take it or leave it. If he then went to another supplier, the result would be the same. Freedom to contract must surely imply some choice or room for bargaining. At the other extreme is the case where parties are bargaining on terms of equality and a stringent exemption clause is accepted for a quid pro quo or other good reason. 17 It is difficult to say how far this difference in judicial attitude applies only to exemption clauses and how far it can be considered to apply more generally to contract terms, since most of the cases have involved exemption clauses. The operation of the contra proferentem rule, under which ambiguities are resolved against the person who drew up the contract, is capable of application to terms other than exemption clauses. For example, terms under which an estate agent claims commission on (or before) the sale of a house are interpreted on the pre- sumption that commission is payable only on a con- cluded sale achieved through the agent's own en- deavours, any flexibility in interpretation thus being resolved in favour of the consumer. 18 Cases of this kind can, however, be seen as akin to exemption clause cases, in that a purported departure is being made from what would be the position under an open contract and, as has been said in relation to contracts for the sale of land: If a vendor means to exclude a purchaser from that which is a matter of c ommon right, he is bound to express himself in terms the most clear and unambiguous, and if there be any chance of reasonable doubt, or reasonable misapprehension of his meaning, I think that the construction must be that which is rather favourable to the purchaser than to the vendor. 19 But even in relation to consumer contracts, there are indications of a change in judicial attitude. The Unfair Contract Terms Act 1977 is the cause. This Act contains very wide provisions restricting the effect of exemption

construction they considered fair and reasonable, Lord Denning M.R. in particular remarking that: in order to decide whether the exemption or limitation clause applies, you must construe the contract, not in the grammatical or literal sense, or even in the natural and ordinary meaning of the words, but in the wider context of the 'presumed intention' of the parties, so as to see whether or not, in the situation that has arisen, the parties can reasonably be supposed to have intended that the party in breach should be able to avail himself of the exemption or limitation clause. 13 This whole approach was rejected by the House of Lords. 2. Consumer Contracts There are grounds for believing that the attitude of the courts to the interpretation of consumer contracts differs — or at least used to differ — from that to the interpretation of commercial contracts. As Lord Diplock said in Photo Production: the reports are full of cases in which what would appear to be very strained constructions have been placed on exclusion clauses, mainly in what today would be called consumer contracts and contracts of adhesion. 16

The reason for a distinction between commercial and consumer contracts is not hard to find.

Exemption clauses differ greatly in many respects. Probably the most objectionable are found in the complex standard conditions which are now so common. In the ordinary way the customer has no time to read them, and, if he did read them, he would probably not understand them. If he did understand and object to any of them, he would

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