Online Reporter
Trust Maanda
Legal Position
AN exemption clause is a provision in a contract which limits or excludes a contracting from liability in certain circumstances.
These clauses provide that in the event of the happening of a certain event, a party to the contract will not be liable to the other.
An example of an exemption clause can read: “The Company shall not be liable for loss of or damage to goods whilst the goods are in custody of the Company for negligence or howsoever caused unless such loss or damage is due to the wilful act of the Company or its own servants.”
An example of an exemption clause is what you see on a bus ticket after you pay your bus fare.
It normally says if the property you bring onto the bus is lost or broken, the bus company will not liable to pay compensation.
In Shona they say: “Chengetedzayi nhumbi dzenyu, dzikatyoka hatiripe” That is an exemption clause that excludes liability on the bus company. You cannot successfully sue the bus company if the goods are lost or damaged.
Another example of exemption clause is where you leave your parcels at a shop counter where there is an inscription: “Goods are left at owner’s risk”. Garage owners premises usually have a notice to the public that vehicles are left at owner’s risk.
The “owner’s risk” clause operates to exonerate a contracting party only in respect of negligence, and not for its gross negligence.
It was held in AMI Zimbabwe (Pvt) Ltd v Casalee Holdings (Successors) (Pvt) Ltd 1997 (2) ZLR 77
(S) that it is not possible for the parties to an agreement to contract out of liability for gross negligence or wilful act.
The simple point is that a party to a contract cannot contract to be excluded from liability for a deliberate wilful act or gross negligence. If such a clause isinserted, it may be struck down as contrary to law or public policy.
The law cannot stand aside and allow such unfair clauses to operate unchecked.
Courts have protected the public by setting limits to the exemptions they will permit and by narrowly interpreting exemption clauses.
A man contracting without duress, without fraud, and understanding what he does, may freely waive any of his rights subject to exceptions to that rule and certainly the law will not recognise any arrangement which is contrary to public policy.
Carriers of goods often include special terms limiting their liability, either specifically or by way of standard conditions. Special terms limiting liability will be narrowly construed so as to give only that exemption from liability that is expressly stated.
A contract to carry “at owner’s risk” does not absolve the carrier from all liability, but only from liability for slight negligence, leaving him liable for gross negligence.
See Mashonaland Railways Company v Gordon 1921 SR 80; Cotton Marketing Board of Zimbabwe v National Railways of Zimbabwe 1988 (1) ZLR 304 (SC).
In general, parties to a contract are at liberty to exempt each other from the consequences flowing from a breach of the contract.
For this reason, corporate entities and public institutions exempt themselves from liabilities they would otherwise incur.
The courts, in order to protect the public, have set limits to the exemption that they will permit by interpreting such a clause narrowly. In doing so, the court endeavours to ascertain what the parties intended the exemption to cover.
However, an exemption that is contrary to public policy will not be permitted.
For example, a party may not exempt himself from his own fraud.
The courts adopt a narrow interpretation of exemption clauses and adopt the principle that, unless the scope of the exemption is clearly expressed, it must be interpreted as giving minimum protection to the party in whose favour it operates.
In Tubb (Pvt) Ltd v Mwamuka 1996 (2) ZLR 27 (S), the Supreme Court had occasion to restate the principles applicable in exemption clauses.
These include that the words of the exemption clause must be part of the contract, and must be sufficiently clear and comprehensive for a court to give effect to them.
If there is any ambiguity in meaning and scope of the exemption, it must be interpreted against the person who drafted it unless he proves that the words used embraced the contingency that has arisen.
If there is not an express reference to negligence in the exemption, the court must consider whether the words are wide enough to cover negligence on the part of the defendant and if so whether the claim for damages may be based on some ground other than negligence.
Where there is exemption excluding liability for negligence, the burden of establishing any other possible ground for liability, such as gross negligence or willful conduct rests upon the claimant.
When entering a contract, be wary of exemption clauses because they exclude liability on the part of the other party to the contract.
Trust Maanda is a legal practitioner and a partner at Maunga Maanda And Associates. He writes in his personal capacity. He can be contacted on +263772432646
