D lost P’s handkerchiefs sent in for cleaning and P sued D. D was allowed by the court to rely on a condition that “The maximum amount allowed for lost or damaged articles is twenty times the charge made for laundering” to limit their liability. Since they could only be sued in tort this condition was held to be effective against tort actions as well as contractual ones.
Greene MR: The obligation primarily under the contract is to launder the items and the secondary obligation is to keep them safe. Breach of secondary obligations, which relate to taking reasonable care are to be brought in tort and not in contractual actions. Therefore since this clause could only relate to negligence, it must be construed as being a limitation in tortious actions (else the term would have no content at all). “Where the head of damage…rests on negligence and nothing else, the clause must be construed as extending to that head of damage, because it would otherwise lack subject-matter. Where…the head of damage may be based on some other ground than that of negligence, the general principle is that the clause must be confined in its application to loss occurring through that other cause to the exclusion of loss arising through negligence…If a contracting party wishes in such a case to limit his liability in respect of negligence, he must do so in clear terms in the absence of which the clause is construed as relating to a liability not based on negligence.”
Mackinnon LJ: He quotes with approval Scrutton LJ’s guiding principles: “In construing an exemption clause certain general rules may be applied: First, the defendant is not exempted from liability for the negligence of his servants unless adequate words are used; secondly, the liability of the defendant apart from the exempting words must be ascertained; then the particular clause in question must be considered; and if the only liability of the party pleading the exemption is a liability for negligence, the clause will more readily operate to exempt him.”