Curtis v Chemical Cleaning Co [1951] 1 KB 805

KEY POINTS

• In contracts, exclusion provisions are rather important. Generally, unless there was fraud or misrepresentation involved,  if the non-benefiting party has signed a document including an exclusion provision, it means they are bound by the terms of that clause. It does not matter whether the signatory read the document or not. The most important thing to remember is that once a document is signed, the signatory is legally obligated by its terms, underscoring the significance of understanding the implications of a contract before signing anything. 

• When one party presents a printed form for signature, failing to highlight the existence or scope of the exemption clause could, in some cases, give the impression that there is no exemption at all—or, at the very least, one that is not as extensive as the one that is present in the document, leading to misrepresentation.

• Any act-verbal or physical, that misleads the other party about the existence or scope of the exclusion clause, can qualify as misrepresentation. If it gives off a false impression, it is enough to be termed as misrepresentation. Such an impression can be expressed simply by handing the customer the document that contains the exclusion clause as if it were a mere receipt or by asking them to sign the document without specifying the condition or explaining the extent of the exemption. 

FACTS

• The plaintiff took her wedding gown to the defendant, Chemical Cleaning Co. to get it cleaned. The defendant gave her a receipt to sign, the staff member stated that the agreement would absolve the defendant of all liability for potential bead or sequin damage to the dress. The plaintiff, believing this explanation, signed the receipt.

• However, when she received the dress back, she realized that it had stains on it. Dissatisfied with the service, she filed a lawsuit against the defendant ( the cleaning company).  

• The defendant tried to invoke the exclusion clause, which effectively released them from obligation for "any damage, however arising." In other words, the exclusion provision was much broader than only covering sequin and bead damage.

• In this case, the court had to decide if the exemption clause was lawful, whether it could shield the defendant from culpability, and whether the staff member's interpretation of the exclusion clause constituted fraud or misrepresentation.

COMMENTARY

• It was held that the staff member’s explanation of the exclusion from liability clause amounted to misrepresentation and in effect, the exclusion of liability clause was not binding on the claimant in this case. 

• The court held that the defendant’s reliance on the exclusion from liability clause was unwarranted because they misrepresented the actual implication of the clause to the plaintiff. Misrepresentation regarding the extent of the exclusion clause by the staff member ( although innocent) outweighs the plaintiff’s signature on the document. The staff member by her innocent misrepresentation gave the plaintiff a misleading impression about the scope of the exclusion clause, which led to her signing the receipt. 

ORIGINAL ANALYSIS

• Plaintiff took a dress to be cleaned by Chemical Cleaning Co (CCD), who asked her to sign a receipt that exempted CCD from liability for any damage to the dress caused by CCD. Plaintiff only signed after CCD assured him that the clause only related to the beads and sequins but not to the dress itself.

• When the dress was badly stained, Plaintiff sued and CA prevented CCD from relying on the exemption clause. 

Denning LJ

• What is sufficient misrepresentation to negate the signature agreeing to the clause?

any behaviour, by words or by conduct…if it is such as to mislead the other party about the existence or extent of the exemption.

• Anything that creates a false impression, whether intentionally or innocently, is enough.