Ailsa Craig Fishing v Malvern Fishing [1983] 1 WLR 964

• Defendant agreed to supply security to Plaintiff’s boats, subject to an exclusion clause and a limitation clause regarding Defendant’s liability.

• Plaintiff’s boat was destroyed due to Defendant’s failure to protect it and Plaintiff sued Defendant.

• HL held that the limitation clause applied but the exclusion clause did not. 

Lord Fraser

• Limitation clauses have to be clear, unambiguous and contra proferentem (rule where an ambiguous clause is to be construed against the interests of the party that included it in the contract).

• The stricter rules that apply to exemption clauses do not apply to limitation clauses. This is because a party would be less likely to have intended to give the proferens complete escape from liability than mere limitation of damages.

• The exclusion clause didn’t apply to this case.