Blog – Latest News
What’s in a Disclaimer?
7th September 2016
Disclaimers, every shopping centre, restaurant and parking lot has one on display somewhere and there’s one lurking somewhere in every email you send and receive.
Disclaimers are by no means new to the South African legal and commercial landscape but with the onset of increased litigation surrounded all types of professional negligence, so called ‘slip & trip’ cases, consumer protection issues and ever increasing electronic communication there’s no doubt that they deserve attention.
Disclaimers can be divided into two categories, displayed notice (physical signs or content displayed on the reverse of a receipt or ticket) and electronic disclaimers (contained in emails or websites).
There are a fair number of cases that deal with disclaimers in the South African context. These cases provide a summary of the legal principles related to disclaimers and are commonly referred to us the “ticket cases”.
The “ticket cases”
The term ticket refers to a variety of documents including, but not limited, to train or bus tickets, a receipt for services to be provided, an order confirmation, sport or other event tickets and delivery notes. While displayed notice refers to a notice which is displayed at the place of the contract and intends to reflect terms which will form part of that contract and be applicable to the conduct of persons while at that location.
Durban’s Water Wonderland (Proprietary) Ltd v Ingrid Botha & Another 1 ALL SA 411
This case concisely summarised the law as developed through the so called ‘ticket cases’, the court held the following;
- The principles of the ‘ticket cases’ applies to issues where reliance is had on the display of a notice containing terms relating to a contract.
- If a party reads a notice and accepts the terms in a notice there is actual consensus. Furthermore if the party sees the notice realises that it contains terms or conditions relating to the contract or use of the service and chooses not to read it there will be consensus.
- In the absence of circumstances described in point 2 above there must be an inquiry into quasi-mutual assent between the parties.
- This involves an investigation into whether the party relying on the displayed notices or disclaimer is reasonably entitled to assume that the other party assented to the conditions therein by their conduct. In this regard the important factor is whether or not the party relying on the disclaimer did what was reasonably sufficient to give notice of the disclaimer.
- Finally it is necessary that the disclaimer be displayed in a way and in a place that a reasonable person would expect the terms therein to be a relevant and binding in terms of the contract.
Cape group Construction (Proprietary) Limited trading as Forbes Waterproofing v Government of the United Kingdom 2003 3 ALL SA 496 (SCA)
The case dealt with additional terms available on the overleaf of a quote which was never provided to the other party. The court reaffirmed the Durban’s Water Wonderland Decision and held that by not sending the terms and conditions on the overleaf the intent was that those conditions were not meant to apply. The court noted that:
- The injunction ‘see terms and conditions overleaf’ does not convey that there are standard terms which would be available for inspection if the addressee wished to see them. Therefore if no additional terms are transmitted there are none applicable to the contract.
- The contra proferentum rule which holds that the party who drafts the contract’s terms is liable where the party is unclear as to the content and intent of the contract.
- In its decision the court effectively stated that overly broad liability clauses would not be enforceable (Such Clauses have now been addressed in section 49 of the Consumer Protection Act which provides that parties must have access to terms and conditions in order to understand them).
Evidently, in so far as displayed or printed disclaimers are concerned the questions that need to be answered are:
- Has the disclaimers been adequately displayed in a place and manner that infers that the disclaimer and its content contain terms that relate to the contract or use of a facility or service;
- Have steps be taken to draw attention to the fact that a disclaimer is applicable; and
- Is the content of that disclaimer accessible and understandable?
Electronic & Email Disclaimers
All electronic communication is subject to the provisions of the Electronic Communications and Transmissions Act 25 of 2002. In terms of Electronic Communications and Transmission Act it is possible to conclude a legally binding agreement through various types of electronic communications such as email.
However the issues arise in terms of section 11(3):
“11(3) Information incorporated into an agreement and that is not in the public domain is regarded as having been incorporated into a data message if such information is:
(a) Referred to in a way in which a reasonable person would have noticed the reference thereto and incorporation thereof; and
(b) Accessible in a form in which it may be read, stored and retrieved by the other party, whether electronically or as a computer printout as long as such information is reasonably capable of being reduced to electronic form by the party incorporating it.”
Section 11 (3) applies to information and terms contained in notices which are not in the public domain but are referred to in a way that a reasonable person would notice them and become aware of the fact that those terms form part of the contract.
There can be no doubt that email and electronic disclaimers fall under the provisions of this section.
Despite the existence of legislation dealing with electronic communication to the best of our knowledge the courts have not ruled on the enforceability of email and electronic disclaimers, however guidance can be found in the ticket cases and section 11(3) referred to above.
The difficulties surrounding email disclaimers (and electronic disclaimers in general) are that they seek to unilaterally conclude a contract or unilaterally include terms into a contract without consensus.
In the case of displayed disclaimers, for example, this problem is overcome through mutual assent as discussed in the ticket cases. That is that you see the ‘enter at own risk’ sign, you read it and you decide to enter the building anyway and in so doing you establish a form of consensus or you leave and the disclaimer is no longer applicable.
In the case of email disclaimer you have to open the email and engage with the content before you are made aware that there’s a disclaimer to consider especially when the disclaimers is in the last line of the footer to the email.
By that time you may have, unknowingly, already accepted a disclaimer you had no knowledge of or you may have already acted in breach of terms imposed by the disclaimer.
Put differently an electronic disclaimer is often not “accessible in a form that can be read, stored or retrieved” until the email has been opened or the website has been entered and as a result “it is not referred to in a way in which a reasonable person would have noticed the reference thereto and incorporation thereof”. It’s the equivalent of placing a disclaimer at the bottom of a swimming pool, you have to dive in to read it and by then you’re soaked.
In light of above it may be difficult to enforce an email or electronic disclaimer however we would submit that, taking guidance from the ticket cases and the Electronic Communications and Transmission Act, the chances of enforceability of email and electronic disclaimers can be improved by:
- having your disclaimer with a hyperlink to its full content boldly displayed at the top of your emails or as a dialog box, which appears as your web page is loaded, that requires input from the user before being able to continue to the site;
- Regularly ensuring that your disclaimer is accessible; and
- Ensuring that you regularly update your disclaimer to ensure it is applicable to the nature of your business and the communications you send.
To conclude the value of your disclaimer, physical or electronic, is dependent on more than it merely being displayed or included.
It has to be displayed in a manner that suggest to a reasonable person that its applicable and that it contains terms that are to be incorporated. Further it must be accessible in a manner that allows a reasonable person to engage with its content and decide whether or not to accept its terms.
Disclaimer: This article is not intended to provide legal advice and does not intend to address any specific or existing circumstances.
For assistance or advice on tenders, deviations and procurement law please contact our nearest office on the details provided on our website.