Consumers are regularly forced to accept the terms of an exemption or disclaimer clause on a take-it -or-leave it basis. More often than not the exemption provided by these clauses are excessively one-sided and so adverse as to be inequitable leaving the vulnerable consumer with troublesome implications.
South African courts have tirelessly been tasked with assessing whether or not such clauses can be enforced. With trite law such as Durban’s Water Wonderland v Botha and Another 1999(1) SA 982 (SCA) and Afrox Health Care Bpk v Strydom 2002(4) SA1 (SCA) setting the benchmark for determining the enforceability thereof consumer’s recourse against the negligent causing of a bodily injury or death have on countless occasions been dismissed due to the permissibility of exemption of disclaimer clauses. The new constitutional dispensation however seems to be tipping the scales in favour of the consumer as historic approaches such as Durban’s Water Wonderland and Afrox Healthcare Bpk must now be seen through the lens of the Constitution.
Post Constitutional trite law such as Barkhuizen v Napier 2007(5) SA 323 (CC) (2007 (7) BCLR 691) and Nadioo v Birchwood Hotel 2012 (6) SA 170 (GSJ) seemingly favours the historic approach of Schierhout v Minister of Justice 1925 AD 417:
“If the terms of an agreement are such as to deprive a party of his legal rights generally, or to prevent him from seeking legal redress at any time in the Courts of Justice for any future injury or wrong committed against him, there would be good grounds for holding that such an undertaking is against public law of the land”
In the Birchwood Hotel case the Court specifically dealt with the question as to whether an exemption or disclaimer clause was binding on the Plaintiff and whether or not it was against public policy. In determining these question the court applied the two stage enquir as formulated in Barkhuizen v Napier. According to the enquiry espoused in the Barkhuizen case the Court may firstly examine whether a term in a contract is objectively reasonable. If it finds that it is, the next enquiry is whether it should be enforced in the particular circumstances.
As stated in Barkhuizen,
“When challenging a contractual term, the question of public policy inevitably arises. Determining the content of public policy was once fraught with difficulties. That is no longer the case. Since the advent of the constitutional democracy, public policy is now deeply rooted in our Constitution and the values that underline it. Indeed the founding provisions of our Constitution make it plain, our Constitutional democracy is founded on, among other values, the value of human dignity, the achievement of equality and the advancement of human rights and freedoms, and the rule of law. And the Bill of Rights, as the Constitution proclaims, is a cornerstone of the democracy, it enshrines the rights of all people in our country and affirms the democratic (finding) values of the human dignity, equality and freedom. Thus a term in a contract that is inimical to the values enshrined in our Constitution is contrary to public policy and is, therefore, unenforceable”.
As stated by the Constitutional Court in the Birchwood Hotel case in applying the principals pronounced in Barkhuizen, further enquiry is necessary where contractual clauses limits a person’s right to juridical remedy. It must be determined whether the enforcement of the contractual term would result in an injustice due to the circumstances of a particular case. The Court expressed the view that exemption clauses that exclude liability from bodily harm in hotels and other public places have the effect, generally, of denying a claimant judicial redress.
The new constitutional dispensation that exemption or disclaimer clauses which exclude liability will not pass constitutional muster can best be summed by the words of Judge Ngcobo in the Birchwood Hotel case:
“A court will bear in mind the need to recognise freedom of contract, but the court will not let blind reliance of the principle of freedom of contract override the need to ensure that contracting parties must have access to court”.
Under the new constitutional dispensation one should therefore be cautious when relying on an exemption or disclaimer clause to escape liability as it may be proven to be unconstitutional. Public policy, with the notions of fairness, justice and reasonableness, would therefore prelude the enforcement of such contractual terms if this amounts to injustice and un fairness.
By: Y.Vosloo (LL.B)