This analysis will examine the legal issues arising from the damage to Shifra’s wedding gown by Kleenem CC. The central question is whether Kleenem CC can rely on the exemption clause contained in the document Shifra signed to avoid liability for the damage. This will involve an analysis of the common law rules on the incorporation of terms, specifically the effect of a signature and misrepresentation, as well as the relevant statutory controls under the Consumer Rights Act 2015.
Incorporation of the Exemption Clause
The first issue is whether the exemption clause, which excludes liability for "any damage howsoever caused," was successfully incorporated into the contract between Shifra and Kleenem CC. The general common law principle is that when a person signs a contractual document, they are bound by its terms, regardless of whether they have read or understood them. This rule was established in L'Estrange v F Graucob Ltd (1934), where the claimant was bound by an exemption clause in a sales agreement she had signed without reading. On this basis, because Shifra signed the document provided by Kleenem CC, she would ordinarily be bound by all its terms, including the wide exemption clause.
However, the rule in L'Estrange is not absolute and is subject to exceptions, one of which is misrepresentation. If a party is induced to sign a document by a misrepresentation as to the nature or effect of its terms, the party seeking to rely on the clause may be prevented from doing so. This principle is illustrated in Curtis v Chemical Cleaning and Dyeing Co (1951), a case with facts very similar to the present scenario. In Curtis, the claimant took a wedding dress for cleaning and was asked to sign a document. When she asked why, the assistant told her it exempted the company from liability for damage to beads and sequins. The dress was returned with a stain. The clause was, in fact, much wider, excluding liability for "any damage, however arising". The Court of Appeal held that due to the employee's misrepresentation, the cleaning company could not rely on the full scope of the clause and was only protected from liability for the specific types of damage mentioned (beads and sequins).
Applying the principle from Curtis, the employee at Kleenem CC misrepresented the scope of the exemption clause to Shifra. She was told it only excluded liability for damage to sequins and beads. In reality, the clause was far more extensive. Relying on this false explanation, Shifra signed the document. The damage to her gown – it being "torn and frayed" – falls outside the scope of what was represented to her. Therefore, Kleenem CC cannot rely on the full, broad wording of the clause to escape liability for this damage.
The Consumer Rights Act 2015
Even if the clause had been validly incorporated without misrepresentation, it would be subject to statutory regulation. As Shifra is an individual acting for purposes outside her trade or profession, and Kleenem CC is a business, their contract is governed by the Consumer Rights Act 2015 (CRA 2015).
Under section 49 of the CRA 2015, there is an implied term that a service provider must perform the service with reasonable care and skill. Given that the gown was returned "torn and frayed," it is clear that Kleenem CC has breached this duty. Kleenem CC is attempting to use the exemption clause to exclude liability for this breach.
However, section 62 of the CRA 2015 states that an unfair term in a consumer contract is not binding on the consumer. A term is considered unfair if, "contrary to the requirement of good faith, it causes a significant imbalance in the parties' rights and obligations under the contract to the detriment of the consumer" (s.62(4)). A term that excludes liability for "any damage howsoever caused" creates a significant imbalance, leaving the consumer with no remedy for poor performance. Schedule 2 of the Act, which provides an indicative list of terms that may be regarded as unfair, includes terms that inappropriately exclude or limit the consumer's legal rights in the event of the trader's non-performance or inadequate performance (para. 1). The clause used by Kleenem CC falls squarely into this category and would almost certainly be deemed unfair by a court.
Conclusion
In conclusion, Shifra has a very strong legal position against Kleenem CC. Kleenem CC’s attempt to rely on its exemption clause is likely to fail for two main reasons. Firstly, at common law, the employee’s misrepresentation as to the scope of the clause prevents the company from relying on its full wording, following the precedent set in Curtis v Chemical Cleaning and Dyeing Co. Secondly, under the Consumer Rights Act 2015, the clause would be considered unfair under section 62 and therefore would not be binding on Shifra. Consequently, Kleenem CC remains liable for the breach of its implied duty to provide the dry-cleaning service with reasonable care and skill, and Shifra can claim damages for the harm caused to her wedding gown.
References
Curtis v Chemical Cleaning and Dyeing Co [1951] 1 KB 805
L'Estrange v F Graucob Ltd [1934] 2 KB 394
Consumer Rights Act 2015
