D agreed to supply security to P’s boats, subject to an exclusion clause and a limitation clause regarding D’s liability. P’s boat was destroyed due to D’s failure to protect it and P sued D. 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.
