Legal Principles and Key Points
- In the case of Hollier v Rambler Motors AMC Ltd 1972 2 QB 71, it was found that for a regular custom created through a course of dealings, to be incorporated as a term of the contract, must be a regular dealing.
- A course of dealings must be substantial in order for oral agreements to incorporate conditions from a normal course of dealings.
Facts of the Case
- C had his car repaired at D’s garage on three or four occasioned over a period of five years.
- On at least two of the occasions, he had signed a form having not read the printed words “the company is not responsible for damage caused by fire to customer’s cards on the premises”.
- By oral agreement made between C and D, D agreed to repair his car.
- Whilst at the premises, the car was damaged by a fire caused by D’s negligence.
- C claimed for damages for the breach of the implied term that D would take reasonable care of his car.
- D relied on the condition excluding responsibility for the damage to cars caused by fire which they contented was incorporated into the oral agreement because of the previous course of dealings with the parties.
- The judge at first instance held that the condition was incorporated into the contract and excluded D’s liability for negligence and dismissed the claim.
- C appealed
Issues in Hollier v Rambler Motors AMC Ltd 1972 2 QB 71
- Could D rely on the written condition of the contract to exclude their liability for negligence of C’s car.
Held by Court of Appeal
- Appeal allowed
- It was found that as there was no sufficient course of dealing, the condition relied on could not be incorporated into the oral contract to exempt D from their own negligence and in any event, the language of the condition was not so plain that it clearly excluded liability for their negligence.
- D was liable to C
- “In each case one has to look at the words which are claimed to exempt. When in fact A can be liable in negligence only, the law, I believe, is that that fact, to employ the words of Scrutton L.J. in Rutter v. Palmer  2 K.B. 87, 92, ” will more readily operate to exempt him.” But the law goes no further than that.
- In saying that, I want to add that I wholly and emphatically agree with what Salmon L.J., has said in his judgment when dealing with Rutter v. Palmer and Alderslade v. Hertdon Laundry Ltd.  1 K.B. 189, when referring to the passage in Lord Greene M.R.’s judgment in the latter case, and with what he has said about Turner v. Civil Service Supply Association Ltd.  1 K.B. 50 and Fagan v. Green & Edwards Ltd.  1 K.B. 102. In the sense I have mentioned and to that limited extent, in this case the defendants are entitled to pray in aid that as bailees they could only be liable in negligence and, therefore, that the court should more readily read these words as sufficient words of exemption. I approach the words in question with that in, mind and, doing so, to my mind these words would not convey to many intelligent laymen that the garage is saying: ” If your car is damaged by fire we shall not be liable, and this is so even though it is due to our own fault that the fire happens.” In my opinion, other and plainer words are required. I therefore agree that on both grounds this appeal should be allowed.” P84 A-D