Exclusion and limitation clauses — SQE1 Contract question
A worked single-best-answer question on exclusion and limitation clauses, with why each wrong option is wrong — the way SQE1 traps candidates.
Priya booked and paid for a two-night stay at the Elmstead Hotel through the hotel's own website. The online booking terms said nothing about liability for guests' property. On arrival she found a notice on the back of her bedroom door: 'The hotel accepts no liability for any articles lost or stolen from guest rooms.' On her second day, a member of staff carelessly left her room unlocked and her laptop was stolen. The hotel relies on the notice.
Which of the following best describes whether the hotel can rely on the notice?
- AThe hotel cannot rely on the notice, because the contract was concluded when Priya booked online and the notice was not brought to her attention before then.
- BThe hotel can rely on the notice, because it was clearly displayed in Priya's room before the theft occurred.
- CThe hotel cannot rely on the notice, because liability for negligence can never be excluded in a consumer contract.
- DThe hotel can rely on the notice unless Priya proves that it fails the reasonableness test under the Unfair Contract Terms Act 1977.
- EThe hotel can rely on the notice, because by staying a second night after seeing it Priya accepted it as a term.
Show answer and reasoning
Rule: A term contained in a notice is incorporated only if reasonable notice of it was given before or at the time the contract was concluded.
- B Terms must be brought to the other party's attention before or at the time of contracting; the contract was made at booking (Olley v Marlborough Court). (right rule, wrong facts)
- C The Consumer Rights Act 2015 s 65 bans exclusion of negligence liability only for death or personal injury; other exclusions are subject to the fairness test. (wrong rule)
- D Consumer contracts are governed by the Consumer Rights Act 2015, not UCTA, and the notice is not incorporated in any event. (wrong rule)
- E The booking was a single contract for two nights made online; continuing to occupy the room does not create a new contract on the notice's terms. (right rule, wrong facts)
Source: Olley v Marlborough Court Hotel [1949] 1 KB 532; Thornton v Shoe Lane Parking [1971] 2 QB 163