Hollier V Rambler Motors (AMC) Ltd

''Hollier v Rambler Motors (AMC) Ltd'' is an English contract law case, concerning the incorporation of terms into a contract and the ''contra proferentum'' rule of interpretation. It shows an example of a very hostile interpretation of exclusion clauses.

Facts

Walter Hollier took his Rambler car to an automobile repair shop, Rambler Motors. He had been to this garage on three or four occasions in the past five years before, and he had usually signed an invoice which said the

"company is not responsible for damage caused by fire to customers’ cars on the premises."

He did not sign the form on this occasion. Unfortunately, some wiring in the garage was faulty. Rambler Motors had negligently failed to inspect or maintain the wiring in the shop. A fire broke out and burnt down the garage, with Hollier's car in it. Hollier sued Rambler Motors for the cost of his car.

Judgment

The Court of Appeal held that a previous course of dealing did not incorporate the term, because there was neither a regular nor consistent course of dealings. It went on to ask what would have happened were it incorporated, and held that the exclusion clause would still not have been effective to save Rambler Motors Ltd for liability, because it should be construed against the person relying on it (''contra proferentum'') and this clause covered more than negligence. A reasonable person would think liability for other things beyond the garage's own control would be excluded, but not the garage's own fault. Salmon LJ observed the following:

He refers to Scrutton LJ in '' Rutter v Palmer'' 9222 KB 87 saying a clear clause excluding negligence liability "will more readily operate to exempt him." Also, in ''Alderslade v Hendon Laundry Ltd'' 945KB 189, Lord Greene MR was not seeking to extend the law, and here was quite different, because the reasonable person would see a number of other causes of fire. It would surprise an ordinary person if it applied to a fire caused by the garage’s own negligence (rather than an external cause). If they wanted to make exclusions for their own negligence 'they ought to have done so in far plainer language'.

Significance

The case "illustrates the courts' reluctance to permit the exclusion of liability of negligence." The court also held that "a customer could understand the clause to mean that the defendants were not liable for a fire caused without their negligence." The court also held that three or four transactions over a five-year period were not enough to incorporate an exemption clause into the consumer contract.

See also

*English contract law
*''Canada Steamship Lines Ltd v The King'' 952AC 192
*''Photo Production Ltd v Securicor Transport Ltd'' 980AC 827

Notes

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English contract case law
English interpretation case law
Court of Appeal (England and Wales) cases
1971 in case law
1971 in British law
American Motors
1970s fires in the United Kingdom
1971 disasters in the United Kingdom
1971 fires in Europe
Automotive repair shops