Occupiers of premises sometimes go the distance when attempting to guard against potential liability for personal injury, theft or damage to property that might occur on their premises. It is not uncommon to see signs similar to the following in several places of business: “Park at your own risk!”; “Swim at your own risk!”; or “Enter at your own risk! The occupier is not liable for any item damaged or stolen from this property howsoever caused!” These terms might also be included in contracts. But just how much of a fail-safe are these exclusion clauses?
Under the Occupier’s Liability Act, occupiers of premises, including business owners who occupy premises either as the owner or as tenant, were permitted to rely on these signs or terms to exclude potential liability. This was permissible because under that Act, an occupier can modify or restrict the duty of care that is owed to its lawful visitors.
But the wind of legislative change has since blown and restricting liability by the use of such signs or contractual terms will not avail the occupier of protection from liability in all cases. Exclusion of liability for personal injury or death The Consumer Protection Act (“CPA”) contains provisions governing unfair contracts. This Act applies to all natural or legal persons involved in trade or business. Under the CPA, it is not permissible to exclude or restrict liability for death or personal injury by giving notice or by way of any term of any contract if the death or personal injury results from the occupier’s negligence. By way of illustration, an operator of a theme park or private beach could erect a sign indicating that it is not liable for death or personal injury “howsoever caused”. However, under the CPA, its liability will not be excluded if one of its patrons suffers personal injury or dies as a result of the operator’s negligence in ensuring that proper safety procedures were implemented. Exclusion of liability for other kinds of loss or damage Unlike exclusion clauses for death or personal injury, exclusion clauses for liability for loss or other damage are not absolutely unenforceable. Under the CPA, liability for other loss or damage can be restricted or excluded but only where such exclusion notice or term satisfies the requirement of reasonableness.A contractual exclusion term is regarded as reasonable if it is a fair and reasonable one to be included having regard to the circumstances. Exclusion signs will satisfy the requirement of reasonableness if the sign is fair and reasonable to allow reliance on it, having regard to all the circumstances.
Notably, the CPA indicates that a person who agrees with a term of a contract or is aware of a sign purporting to exclude liability for loss or damage (not including death or personal injury) is not to be taken to have voluntarily accepted any risk.
These kinds of signs and terms are notoriously found in car parking lots and on parking tickets. Nevertheless, their exact effect is not quite clear. What is clear is that these signs or terms are not by themselves a bar to liability for loss or damage. It is also clear that the reasonableness requirement must be satisfied in all instances if the occupier is to benefit from the terms or signs. Consequently, each case will have to be considered on its own facts to make that determination.
Considerations affecting the question of reasonableness include the bargaining strengths of the parties, whether a customer knew or ought to have known of the existence or extent of the term in question and the availability of insurance in the allocation of the risks. For instance, the courts have held that it is not reasonable to exclude liability in the case of a large company attempting to exclude the liability of one of its consumers who suffered economic loss or in circumstances where the exclusion clause was written in fine print. Any other range of considerations can also render an exclusion term or sign unreasonable and therefore of no effect in excluding liability.
Notwithstanding the provisions of the CPA, these exclusion terms or notices are still in vogue. It is clear that a person involved in trade or business cannot exclude liability for personal injury or death caused by negligence. However, it is possible to do so in the case of other kinds of loss or damage if the requirement of reasonableness is satisfied.