First Principles of Business Law

Question 3.

If Miles can prove a breach of contract, and claims damages for breach of contract, will he be limited to a maximum claim of $5,000 even though Miles was not made aware, when he signed the contract, of the term limiting the amount of damages that can be claimed?

 (a) No. Miles will not be bound by terms in the document he signed if he was unaware of those terms and they were not pointed out to him. The principle established in Causer v Browne should be applied.

(b) Yes. By signing a document he knew was a contract, Miles is agreeing to be bound by whatever terms it contains. The principle applied in L'Estrange v Graucob Ltd should be applied.

(c) No. Even if it is included as an agreed term of the contract, this clause will not be enforced by the courts because it will be interpreted 'contra proferentem'. 

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