Incorporation: reasonable notice in time. The offer was the pile of deckchairs and acceptance was removing a deckchair from that pile. The ticket might come later and so was not part of the contract formation process.

Notice at the entrance of a car park stating that parking was to be ‘at owner’s risk’. Entry was controlled by means of an automatic barrier and a machine before the barrier dispensed tickets which were ‘issued subject to conditions displayed on the premises’. A notice inside the car park stated that the car park owners were not liable for injury to customers. CA held that the exemption on the ticket came too late. The offer in the notice at the entrance was accepted when the motorist drove up to the machine.

Incorporation by reasonable notice and automatic machines. The notice at the entrance, which was incorporated, was interpreted so that it did not cover personal injury, only damage to or loss from cars.

A clause imposed a fee of £5 per day for the late return of photographic transparencies. There were 47 of these transparencies and they had been kept inadvertently for an additional two weeks and a charge of £3,783.50 had been imposed. CA held that this term had not been incorporated since it was particularly onerous and unusual and therefore had to be fairly and reasonably brought to the other’s attention, which had not happened.

A higher standard of incorporation will apply if the particular clause is considered to be onerous or unusual.

A contract involving the provision of security services for a factory contained a wide exemption clause exempting the security provider from loss. The security firm’s employee started a fire on the premises and the factory owner suffered significant loss. HL held that as a matter of construction on its natural and ordinary meaning the clause in the contract did cover such a deliberate act. This was a commercial contract, the fee was modest compared to any potential liability, and the factory owner was expected to have insurance cover. The parties should be free to allocate their own risks.

Construction of exemption clauses: natural and ordinary meaning with clear words needed to cover a breach of this nature. Commercial contracts where the parties are of equal bargaining power: in general, the parties are free to allocate responsibility for contractual risks through the use of exemption clauses.

Bank’s loan agreement provided that if the debtor defaulted on the loan, contractual interest on the outstanding debt remained payable until the debt was discharged. The judgment debt was ordered to be paid by instalments but it did not include the contractual interest so that, having paid the instalments, the debtor would find that he or she still owed money in respect of the interest. HL rejected the argument that ‘interest’ was a core term relating to price for the service supplied. Therefore, it could be assessed within the legislation regulating unfair terms. Nevertheless, HL concluded that any unfairness to consumers resulted from the inability to add the contractual interest to the judgment debt and not from the term itself.

Legislation governing ‘unfair terms’: scope of application and meaning of core terms which could not be assessed for fairness as compared to ancillary terms (which could be) and approach to determining unfair contract terms in consumer contracts.