Business Law LST2BSL
Guidelines - answering problem style questions
IRAC method
§ Issue
§ Rule
§ Application
§ Conclusion
1. Issue
Identify the key legal points or issues.
2. Rule
What is the legal rule or principle governing the situation in the problem? At least one case should be referred to in this section in details – and cases correctly cited.
3. Application
How does this rule apply to the facts of the problem? If the facts do not fit neatly within the rule what are some of the alternative applications?
4. Conclusion
What is the most probable conclusion after discussing the alternatives?
EXAMPLE QUESTIONS
While his car is parked at a parking station, Luke drops his car keys next to the car door. A thief finds the keys and drives the car to the exit station. The thief tells the attendant that he has lost his ticket and pays the required fee. The attendant lets the thief leave. There is a sign inside the station stating that the station owner “accepts no responsibility for loss or damage to any car parked in this parking station.”
Is the station liable for the loss of Luke’s car?
Answer
Issue
Is a car parking station responsible for the loss of a customer’s car when :
· an employee has been negligent in allowing the customer’s car to be stolen; and
· there is a notice within the station excluding liability for loss; or
Rules
An exclusion clause will be valid if reasonable notice is given. The party whose right to claim for loss or damage to goods under a contract must have been fully aware of the exclusion clause before the contract was made. In Thornton v Shoe Lane Parking [1971] 2 QB 163 a contract for parking was made before the ticket was dispensed. The ticket contained a clause stating the conditions of entry were displayed inside the parking station. The plaintiff was injured while in the parking station. The court held that insufficient evidence of the exclusion was given.
Even if reasonable notice is given, an exclusion clause will only exlude liability for acts or omissions within the scope of the contract. In Sydney City Council v West (1965) 114 CLR 481 a car park was liable for the theft of a customer’s car because it allowed a thief to leave without a ticket.
Application
Insufficient notice was given about the exclusion clause. Luke’s attention to the notice inside the car park was only drawn after he had entered into the car park i.e paid the fee and received a ticket. .Even if the notice had been given before Luke entered the car park, the notice would not be effective against Luke as the exclusion clause would not exclude the car park’s liability for an act of an employee that was negligent and outside the terms of the contract.
Conclusion
The car parking station would not be entitled to rely on the exclusion clause and is liable to Luke for the loss of his car.
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