First Principles of Business Law

The contents of a contract

4. Terms that exclude or limit liability

4.5. Interpreting exclusion and limitation clauses continued...

 

 

 

Read the facts and the question and then choose the best answer.

A, a dry-cleaner, agrees to clean B's expensive coat. B agrees that A will not be liable for any damage to the coat. After cleaning the coat, but before B collects it, A borrows it and wears it on the way home. Unfortunately, the coat catches in A's car door and is damaged.

Does the exclusion of liability clause protect A from liability for this damage to B's coat?

(a) Yes, because the meaning of the clause is clear, and because it was agreed to by both parties.

(b) No, because the damage occurred while A was doing something wholly outside of the cleaning contract.

 

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