White v John Warwick & Co [1953] EWCA Civ 2 (24 June 1953)

A newsagent hired a faulty tricycle from the defendants under a contract containing an exemption clause. He was injured and sued. The court held that the clause exempted the defendants from their strict contractual liability, but not from their parallel liability for negligence.

Facts

The plaintiff, a newsagent, hired a tradesman’s tricycle from the defendants for his newspaper round. The written hire agreement contained Clause 11, which stated: “Nothing in this agreement shall render the owners liable for any personal injuries to the riders of the machine hired”. While the plaintiff was riding the tricycle, the saddle tilted forward, causing him to be thrown off and sustain injuries. He brought an action for damages, alleging negligence by the defendants in failing to properly maintain the tricycle, and alternatively, a breach of contract for supplying a defective machine. The County Court Judge found that the defendants had been negligent but held that Clause 11 exempted them from all liability. The plaintiff appealed to the Court of Appeal.

Issues

The central legal issue was the proper construction of the exemption clause (Clause 11). The court had to determine whether the clause was effective in excluding the defendants’ liability for negligence, in addition to their potential liability for breach of contract.

Judgment

The Court of Appeal unanimously allowed the appeal, holding that the exemption clause did not protect the defendants from a claim in negligence. The court reasoned that the defendants had two potential heads of liability: one for breach of their contractual obligation to supply a machine reasonably fit for its purpose, and another in tort for negligence.

Lord Justice Singleton

Singleton LJ identified that the defendants’ liability could arise from either the contract or from negligence. He applied the principle from Alderslade v. Hendon Laundry, Limited, which states that where a party seeks to exempt themselves from liability for negligence, they must do so with clear words. If the clause could be interpreted as covering another head of liability which is not based on negligence, it will generally be confined to that liability. Here, the defendants had a strict contractual duty. He stated:

“If the defendants have failed to provide a machine reasonably fit for the purpose for which it was required, that is a breach of contract, and for that breach they are liable in damages… The clause may be said to be dealing with the subject-matter of the contract… In so far as their liability was a strict liability, this clause may be used as a defence for them; but, in my opinion, it ought not to be construed as a defence to a claim for negligence.”

Therefore, the clause covered the contractual breach but was not sufficient to exclude the separate claim in tort.

Lord Justice Denning

Denning LJ articulated a now-famous two-part test for interpreting such clauses. He explained that the defendants had two distinct duties: a contractual duty to provide a fit machine, and a tortious duty to take reasonable care. He formulated the principle as follows:

“In this type of case, two principles are well-settled. The first is that if a person desires to exempt himself from a liability which the common law imposes on him, he can only do it by using clear words… The second is that if there are two possible heads of liability on the defendant, one for negligence, and the other a strict liability, an exemption clause will be construed, so far as possible, as exempting the defendant only from his strict liability and not as relieving him from his duty to use due care.”

He argued that the words “liable for any personal injuries” were general and could be interpreted as applying only to the strict liability arising under the contract’s implied warranty of fitness. To exclude negligence, the clause needed to be more specific. Because the clause was ambiguous, it was construed contra proferentem—against the party seeking to rely on it (the defendants).

Lord Justice Morris

Morris LJ concurred, emphasizing that to exclude liability for negligence, the language must be clear and explicit. He reasoned that Clause 11 could be given ample meaning by limiting its effect to the strict liability arising from the contractual warranty, without extending it to cover liability for negligence. The clause did not clearly and plainly state that the defendants were absolved even if they were negligent.

Implications

This case is a landmark authority on the interpretation of exemption clauses, particularly where concurrent liability in contract and tort exists. It firmly established the principle that for a clause to exclude liability for negligence, the language used must be exceptionally clear and unambiguous. The decision reinforces the court’s protective stance towards claimants and its application of the contra proferentem rule, ensuring that parties cannot easily contract out of their common law duty of care without explicitly stating so.

Verdict: Appeal allowed. The case was remitted to the County Court for damages to be assessed.

Source: White v John Warwick & Co [1953] EWCA Civ 2 (24 June 1953)