Unfair Contract Terms Directive, Article 2 Unfair Contract Terms Directive, Article 3, 1.

1. An exemption clause does not serve to exempt from dolus or negligence when the obligor has not acted in accordance with the normal grade of diligence required by law in the execution of any contract.
2. A clause exempting liability for such irresponsibility does not exempt when there is an essential violation of the contract and shall be considered to be null on the basis of public policy and morals.
3. The validity or otherwise of exemption clauses is to be assessed according to facts on a case-by-case basis.
Note: this decision was given in 1995 well before the coming into force of the applicable provisions on unfair terms under the Consumer Affairs Act (which provisions came into force in 2001). This notwithstanding the Court on the basis of the general principles applicable under Civil Law decided that the said term was unfair.

The consumer (plaintiff) had sent her wedding dress to the plaintiff for dry-cleaning. Two months later, she was informed that the dress had been ruined and torn by the dry-cleaning process. There was no written contract between the trader and the consumer however the trader claimed that it was understood that there was a general disclaimer that works where carried out at the consumer’s sole risk. The plaintiff argued that the minimal price charged for the dry-cleaning of such an expensive dress was evidence of the fact that the risk was to be borne by the defendant. An expert confirmed that in fact the dress had been damaged due to high temperatures that may have been caused involuntarily during the drying cycle.

Quoting English and Italian jurisprudence, the court held that exemption clauses could be accepted only where these were fair and reasonable. Disclaimers such as the verbal disclaimer in this case, no matter how generic the wording used is, may only be availed of when the party concerned has carried out its obligations under the contract. The trader cannot avail himself of any such exemption clauses to exonerate himself from any liabilities vis-à-vis the consumer, including he failure to exercise due diligence in the execution of the service being rendered – in this case the dry-cleaning services of a wedding dress.

It is necessary to examine the contract as whole and to consider which terms, express or implied, impose an obligation on the party. If he has been guilty of a breach of those obligations in a manner which goes to the very root of the contract, he cannot rely on the exempting clauses.

The court observed furthermore that the trader generally required a signed exemption clause when he felt that a particular dry-cleaning job was risky. This procedure had not been followed in this case and therefore even the validity of the alleged oral exemption clause was debatable.

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