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GAZETTE
JULY-AUGUST 1981
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
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
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