Dec 12, 1985. The impact of freedom of contract in the 19th century extended far beyond the legal arena as an economic slogan and an ethical attitude. Atiyah traces the development and subsequent decline of the freedom of contract, depicting its effects on the law's development and the foundation of contractual. Based liability. ATIYAH, THE RISE AND FALL OF FREEDOM OF CONTRACT 1-7. (1979) (introducing the argument in favor of reliance-based liability). The approach developed in this Essay is different in that it maintains the promise, rather than harm or benefit, as the basis of liability, but does not require consent.

• I have also read the strongly reasoned majority judgment prepared by my colleague Ngcobo J. Whilst I agree with the majority judgment in some respects, I regret that I am unable to embrace its reasoning and primary conclusion that the impugned time bar clause does not violate public policy because the agreed facts do not show that it is unfair to the applicant. This conclusion Ngcobo J reaches by holding that the facts do not disclose any reason for non-compliance that would render the enforcement of the time bar provision unjust and unfair. In his view, the onus is upon the party seeking to avoid the harshness of a time limitation clause to show that the contractual provision is contrary to public policy in the sense that it does not afford an adequate and fair opportunity to seek judicial redress. • In my view, the fault line in the reasoning of the majority judgment lies in the way it frames the enquiry into whether a contractual provision offends public policy.

The judgment advocates that the consistency of a contractual term with public policy must be assessed by reference to the circumstances and conduct of the parties to the contract. In this particular case, the judgment goes on to hold that “the fairness or otherwise of the clause must therefore be assessed by reference to the circumstances of the applicant.” • This preferred subjective yardstick has prompted a fulsome enquiry into: (a) whether the applicant is poor or illiterate; (b) whether he was unaware of his rights; (c) whether he had access to professional advice; and (d) whether he was impeded by financial, educational or geographical reasons from meeting the deadline set by the time bar. In the same vein, much has been made of the fact that he is a software developer and drives a new BMW 328i, which in the words of the Supreme Court of Appeal is “a vehicle seemingly appurtenant to a reasonably affluent middle-class lifestyle.” The majority judgment also notes that the applicant lodged his claim with the insurance company promptly after the motor collision that saw his motor vehicle damaged beyond repair, thereby implying that he could have issued summons well within the 90-day prescriptive period. In effect, the applicant’s personal attributes and station in life played a decisive role in the determination of the majority judgment that the time bar clause is fair and just and thus accords with public policy. • In my view, the enquiry must be characterised differently. The appropriate test as to whether a contractual term is at odds with public policy has little or nothing to do with whether the party seeking to avoid the consequences of the time bar clause was well-resourced or in a position to do so.

The question to be asked is whether the stipulation clashes with public norms and whether the contractual term is so unreasonable as to offend public policy. In the context of this case, the question to be posed is whether the provision itself unreasonably or unjustifiably limits the right to seek judicial redress. Ordinarily, the answer should not rest with the peculiar situation of the contracting parties, but with an objective assessment of the terms of their bargain.

• The proper approach would be to look at the time bar stipulation itself within the context of the entire agreement with a view to assessing whether it evinces a tendency or reasonable likelihood to deprive the claimant of the right to approach the courts for redress. When one weighs whether a contractual term is at variance with public policy, it matters little, or perhaps matters not, what the personal attributes of the party seeking to escape the results of the time bar are. It is not inconceivable that the personal and social station of the claimant may have some bearing on the public policy evaluation, but ordinarily it is not decisive. It is the likely impact of the impugned stipulation that should be determinative of what public notions of fairness may tolerate.

• Courts emphasise that it is the tendency of the clause to deprive the respondent of his right to judicial redress, which should be scrutinised for reasonableness. Public policy cannot be determined at the behest of the idiosyncrasies of individual contracting parties.

If it were so, the determination of public policy would be held ransom by the infinite variations to be found in any set of contracting parties. In effect, on the subjective approach that the majority judgment favours, identical stipulations could be good or bad in a manner that renders whimsical the reasonableness standard of public policy. • The issue whether the peculiar situation of contracting parties should enter the equation in assessing a contractual term, which is said to offend public policy, is neither novel nor free from controversy. But it is, by now, well settled. In fact, judicial opinion on the issue has a century long pedigree and was recently confirmed by the unanimous Supreme Court of Appeal judgment of Bafana Finance Mabopane v Makwakwa and Another. • A few examples should suffice.

In Sasfin (Pty) Ltd v Beukes, the court was called upon to determine whether certain provisions of a cession concluded by a medical practitioner in favour of a finance house were contrary to public policy. Smalberger JA made it clear that what is important is the likely effect of the contractual term complained of and not the personal characteristics of the party seeking to escape the oppressive stipulation. Referring to the impugned stipulation of the cession, he states: “ Clause 3.4.2 is couched in very wide terms.

It gives Sasfin carte blanche in regard to the sale of Beukes’ book debts. It is open to abuse, and the likelihood of undue prejudice to Beukes exists if its terms are enforced. As stated in Eastwood v Shepstone (supra), it is the tendency of the proposed transaction, not its actually proved result, which determines whether it is contrary to public policy.” • Following on several divergent decisions, a unanimous Appellate Division in Ex Parte Minister of Justice: In re Nedbank Ltd v Abstein Distributors (Pty) Ltd and Others and Donelly v Barclays National Bank Ltd re-endorsed the approach laid down in Sasfin on how to assess terms said to be contrary to public policy. The court had to decide whether a clause, which provides for a conclusive proof certificate of the amount of indebtedness under a suretyship, is contrary to community notions of fairness. The Appellate Division reiterated the approach in the following words: “ The identity of the creditor (and, for that matter, the debtor) is to my mind irrelevant to the validity or otherwise of a conclusive proof clause. Were that ever to be allowed to be a relevant consideration, we would soon find ourselves in the legal quagmire so graphically and correctly described by a full bench of the Cape Provincial Division in Standard Bank of SA Ltd v Wilkinson (C).” • In Standard Bank of SA Ltd v Wilkinson, a full court of the Cape High Court, dealing with an attack on the validity of a suretyship on the grounds of public policy, remarked that: “ If once clauses come to be judged...

Against the purpose of the contract, its setting and the relationship between the parties, creditors will come to be faced by a multiplicity of defences by ‘recalcitrant debtors’ and sureties seeking to have their agreements, freely and voluntarily entered into, declared contra bonos mores. It will, we fear, give rise to a plethora of litigation based upon the ‘last resort’ defence of public policy. It will also no doubt, in such event, produce the many conflicting decisions on individual clauses that presently exist.” • Lastly, in Bafana Finance, the Supreme Court of Appeal unanimously emphasised that whether a clause is inimical to public policy will depend upon whether it evinces a tendency rather than proved results to deprive another contracting party of the right to approach the Court for redress. • Whilst there is often merit in contextual analysis, it is clear that contractual terms should not be tested for their consistency to public norms by merely observing the peculiar situation of contracting parties. The enquiry must rather focus on the arrangement that the stipulation contemplates, on its impact on the parties, whoever they may be, on its tendency or likely outcome and ultimately, on its fairness between the parties as measured against public notions of fairness. This approach is particularly apposite in our constitutional setting.

Trite as it is that our constitutional values allow individuals the dignity and freedom to regulate their affairs, they also require that bargains, even if freely struck, may not steer a course inimical to public notions of equity and fairness, which are now sourced from constitutional values. To defeat a complaint that a contractual term offends public policy by holding that the complainant has not shown individual unfairness is, in effect, to extol the laissez faire notions of freedom of contract at the expense of public notions of reasonableness and fairness.

• I am therefore in agreement with Sachs J who holds that courts are obliged to find relevant objective factors that might provide pointers towards public policy compliance in relation to terms limiting access to courts. And Sachs J does so admirably by looking first at the time bar provision itself within its full contractual setting.

He meticulously examines other ancillary documents which provide valuable clues on the likely manner in which the insurance agreement was concluded. • Here, I pause to record that the facts in the stated case itself may be terse.

Yet to the pleadings are attached the voluminous insurance agreement and ancillary correspondence which form part of the pleadings and may be rightly looked at in disposing of the special plea. Indeed clause 5.2.5, on which the special plea is founded, does not appear in the stated case and can only be reached by reference to the pleadings. • Sachs J correctly concludes that the contract of insurance in this case is a standard form contract or a contract of adhesion, which on its very face, claims copyright on the contract form. I did not understand the respondent to contend that the contractual terms, other than the schedule that contains the particulars of the applicant and his motor vehicle, were adapted or customised to suit the applicant. • Thereafter, Sachs J rightly seeks guidance from international responses to contracts of adhesion and in particular, from the United Nations instruments and developments in the United Kingdom and South America. He examines proposals of the South African Law Reform Commission on the reviewability of unfair terms in contracts and on legislative reform in the area of consumer protection.

Sachs J provides a survey of academic opinion and thereafter points to far-reaching statutory reform on prescriptive periods for diverse claims as indicative of burgeoning public policy on reasonable limitation of actions. Lastly, Sachs J turns to the specific time bar in this case and correctly finds it offensive to public policy as it unreasonably limits the right to an adequate and fair opportunity for legal redress entrenched in section 34 of the Bill of Rights. Below I proffer a few additional reasons.

• As the majority judgment does, I hold that the two-part test in Mohlomi, on whether a provision affords a claimant an inadequate and fair opportunity to seek legal redress, applies in this case. The first part relates to whether the impugned term is too short, first to give notice and next to sue. The second part probes whether the stipulation is inflexible and requires strict compliance, whatever the circumstances. • I accept that the special plea has to be decided on the stated case, sparse as the facts may be. In this regard, the facts must be understood within the context of the pleadings and, in particular, the insurance agreement and other annexures.

However, I do not accept that the facts are not enough to adjudicate the special plea of prescription and the replication that the contractual provision is inimical to public policy. • For my part, the impugned time bar clause, clause 5.2.5, fails the test laid down in Mohlomi on both counts. The clause is unreasonably short and it is manifestly inflexible. It is couched in certain and explicit terms. The claimant must serve summons within 90 days of repudiation.

If this is not done, the insurer is released from liability. The clause irreversibly takes away, in an unreasonably short time, the right of action of the insured and, in that way, denies the insured a reasonable opportunity to have the dispute decided by an independent tribunal. • The period is unreasonably short on several grounds. First, to require a claimant to find litigation funds, appoint an attorney, cause counsel to be briefed and issue and serve summons within a period of 90 days of repudiation of the claim, is unreasonable and unconscionable. The likely impact or tendency of this brief time bar is to release the insurer from liability to its considerable financial gain and to the irreparable prejudice of the insured. • Second, it is not clear what legitimate purpose is served by this unseemly haste.

Once the claimant has given timeous notice of an intention to claim, the insurance company is afforded the opportunity to investigate the claim and to preserve evidence for trial. One must wonder why this one-sided rush is necessary to protect the interests of the insurance company. The likely harm to the insured that the provision wreaks seems disproportionate to the interest the insurance company seeks to protect. In other words, the prejudice that the clause visits on claimants is disproportionate to the conceivable benefits that it confers on the insurance company. • Third, the attenuated time bar is not reciprocal.

The insurance agreement does not contain any time bar to the insurer’s right of action against the insured. It may repudiate the claim when it chooses and any claim it may have against the insured seems to be limited only by the three-year prescription period of general application. • Fourth, at least since the advent of our democracy, Parliament seems to have adopted a new approach to ameliorate the consequence of time limitation clauses in statutes. Here I have in mind the Institution of Legal Proceedings against certain Organs of State Act.

Its declared purpose is to regulate and harmonise the periods of time within which to institute legal proceedings against certain organs of State and to give notice of such proceedings. Under section 2(2)(b), debts which became due after the commencement of this statute are governed by Chapter III of the Prescription Act. • The effect of this is that the prescription period for delictual debts against the State organs, governed by the Institution of Legal Proceedings against certain Organs of State Act, is now three years. This is in line with the prescription period that pertains to delictual debts in general. The period within which legal proceedings may be instituted against State organs has therefore been extended to three years. In addition, the notice of such proceedings must now be given within six months from the date on which the debt became due. • What is more, a court is empowered to condone non-compliance with the notice provision if it is satisfied, among other things, that good cause exists for the failure to give timeous notice, and the organ of State was not unreasonably prejudiced.

This statute therefore permits account to be taken of the claimant’s fault, or the lack of it as well as prejudice suffered by the State, or the absence of it. In my view, these statutory trends in prescription of delictual claims against the state and private entities are indicative of the boni mores. • In the present matter, the impugned time bar clause, on its terms, does not provide for extension of time on good cause shown, and is enforceable whatever the reason is for failure to comply. In other words, the clause may be enforced however unfair or unjust its consequences may be. In this Court, the respondent contended that the time limitation is not an absolute defence to an insurance claim brought out of time because, at common law, the applicant has remedies that may be invoked to escape its oppressive consequences. The respondent relied on the doctrine of good faith and the common law maxim that the law does not require people to do the impossible. However, given the view the majority judgment takes that the facts are.

Insufficient, it does not find it necessary to reach a firm conclusion on whether the maxim relating to impossibility and the requirement of good faith may be applied to the enforcement of a time limitation clause. Hadoop Installation On Windows 7 Guide on this page. In effect, the majority judgment does not decide whether the clause is inflexible because there are no facts to show why the applicant did not comply with the time limitation. • It seems clear that the respondent’s contention that there are common law defences which could render the time bar clause flexible is, at best, of no practical value in this case.

This argument is an after-thought. It was never pleaded or argued in the High Court or the Supreme Court of Appeal. It amounts to a belated invitation to this Court to develop the common law. In any event, the common law qualification that the respondent seeks to have read into the stipulation flies in the face of the respondent’s actual conduct, which is that the special plea is sufficient to destroy the applicant’s claim. In my view, the clause means what it says. If the summons is not served within 90 days of repudiation of the claim, the insurer is released from liability. The clause is, on its face, unreasonable and unjust.

It denies the applicant a reasonable and adequate opportunity to seek legal redress and is therefore at odds with public policy. OfREGAN J: • I have had the pleasure of reading the judgment prepared in this matter by Ngcobo J. I concur in the order he proposes and in the reasoning in support of that order as it appears in paragraphs 1-72 and paragraphs 84-91.

In my view, the discussion in paragraphs 73-83 is not necessary for the decision in this case. As Ngcobo J explains in paragraph 84, there are no facts on the record to establish that it was either impossible for the applicant to issue summons within the period of 90 days as required by the contractual time period or to establish that it would, for any other reason, be unfair to enforce the time limitation clause against him. In the absence of any facts to this effect, there is, in my view, no need for this Court to consider in what circumstances a court may, in terms of the principles of contract, decline to enforce a time limitation clause against a particular applicant based on the defences of impossibility or good faith. That difficult question can stand over for decision in an appropriate matter. I accordingly respectfully decline to consider the issues discussed in paragraphs 73-83 of Ngcobo J’s judgment. For the rest, however, I am in agreement with his judgment. • I would hold, then, that in the particular contractual circumstances of this case, considerations of public policy animated by the Constitution dictate that the time-bar clause in question limiting access to court, should not be enforced, and that the insured should not be deprived of his right to proceed with his claim on the merits.

On this basis, and leaving open for future consideration whether onerous and unilaterally imposed terms in standard form contracts of adhesion should in general be regarded as offensive to public policy in our new constitutional dispensation, I would uphold the appeal and dismiss the special plea. LANGA CJ: • I concur in the judgment of Ngcobo J, with the exception of one matter on which I prefer not to express an opinion at this time.

To the extent that Ngcobo J’s judgment holds that the only acceptable approach to challenging the constitutionality of contractual terms is indirect application under section 39(2), I disagree. While I agree that indirect application may ordinarily be the best manner to address the problem, I am not convinced that section 8 does not allow for the possibility that certain rights may apply directly to contractual terms or the common law that underlies them. Fortunately, I find it unnecessary to decide the matter at this time as, to my mind, what public policy requires in this case is exactly the same as what a direct application of section 34 would demand.

Indeed, the distinction between direct and indirect application will seldom be outcome determinative. I would therefore prefer not to preclude the possibility that the Bill of Rights may, in some circumstances, apply directly to contracts. Section 36(1) of the Constitution provides: “ The rights in the Bill of Rights may be limited only in terms of law of general application to the extent that the limitation is reasonable and justifiable in an open and democratic society based on human dignity, equality and freedom, taking into account all relevant factors, including— (a) the nature of the right; (b) the importance of the purpose of the limitation; (c) the nature and extent of the limitation; (d) the relation between the limitation and its purpose; and (e) less restrictive means to achieve the purpose.”. The applicants amended replication reads: “ 1.6.1Klousule 5.2.5 van Bylaag ‘PB’, kom neer op 'n sogenaamde tydsbeperkingsklousule, oftewel vervaltermyn. Above n at para 12. The Court formulated the test as follows: “ What counts rather, I believe, is the sufficiency or insufficiency, the adequacy or inadequacy, of the room which the limitation leaves open in the beginning for the exercise of the right.

For the consistency of the limitation with the right depends upon the availability of an initial opportunity to exercise the right that amounts, in all the circumstances characterising the class of case in question, to a real and fair one. The test, thus formulated, lends itself to no hard and fast rule which shows us where to draw the line. In anybody’s book, I suppose, seven years would be a period more than ample during which to set proceedings in motion, but seven days a preposterously short time. Both extremes are obviously hypothetical. But I postulate them in order to illustrate that the inquiry turns wholly on estimations of degree.”. Under section 32 of the Police Act 7 of 1958, legal proceedings against the police had to be instituted within six months from the date of the cause of action, and one month’s prior notice of such proceedings had to be given.

When this statute was amended in 1995 by the, the period was extended to twelve months in terms of The one significant change was, which empowered courts to condone non-compliance with time limitation provisions where the interests of justice required it. Therefore permitted account to be taken of the claimant’s fault, or the lack of it, and the prejudice suffered by the State, or its absence. Section 113 of the Defence Act 44 of 1957 required proceedings against the defence force to be instituted within six months from the time when the cause of action arose and also required a month’s prior notice of such proceedings. Of the section 113 of the Defence Act have been repealed by the Institution of Legal Proceedings against certain Organs of State Act, 2002, with the result that legal proceedings against these organs of State must now be instituted within three years. The first page, headed “Endorsements”, indicates that the previous premium for ensuring a car radio in the Hyundai has been cancelled and replaced by premiums for a car radio, CD shuttle and satellite navigation in the BMW. The second page, headed “Policy Schedule”, gives details about the insured, bank debit order details and broker details. This is followed by Section 2 in which R2 000 000 is given as the sum insured for personal liability for a premium of R1,63.

Section 3, dealing with household goods, covers the rest of the page. It gives details about the sum insured and the premium, describes the house and itemises security requirements that have to be complied with, stating that theft cover will only be given once all the security requirements have been installed. The third page itemises the all-risks cover and premiums for the car radio and satellite navigation.

I stress “a reasonable person in his or her position”. In relation to precisely the same documents the situation of two business people bargaining with each other, each backed up by a battery of lawyers and accountants, even if one is economically in a much stronger position than the other, would be very different from that of an insurance company dealing with a motorist coming off the street to its office, or phoning through instructions.

I would emphasise too, that I am not dealing with terms that were actually agreed upon, or that were part of or implicit in the bargain actually struck, or that provided for reciprocal benefits. In these cases different considerations could apply.

Fridman refers to Maine Ancient Law: Its Connection with the Early History of Society and its Relation to Modern Ideas (Oxford University Press, London 1861) at 140. Maine writes: “ Nor is it difficult to see what is the tie between man and man which replaces by degrees those forms of reciprocity in rights and duties which have their origin in the Family. It is Contract.

Starting, as from one terminus of history, from a condition of society in which all the relations of Persons are summed up in the relations of Family, we seem to have steadily moved towards a phase of social order in which all these relations arise from the free agreement of Individuals.... [W]e may say that the movement of the progressive societies has hitherto been a movement from Status to Contract.” (His emphasis.). Atiyah The Rise and Fall of Freedom of Contract (Clarendon Press, Oxford 1985) at 731. At 731-2 he adds the following: “ The problem is all the greater because... In the high noon of classical theory the Courts gave a new meaning to the requirements of the Statute of Frauds. The written note or memorandum required by the Statute, they insisted, was merely evidence of an agreement; the actual binding contract rested not in the writing itself, but in the will of the parties.

But when, later in the nineteenth century, the Courts were faced with the new problems of printed clauses, or tickets containing references to terms contained elsewhere, there was an increasing tendency to treat the written terms, subject to certain conditions, as themselves the actual words of the contract.”. In similar vein Collins above n at v-vi explains the changed mode of thinking as follows: “ Perhaps no other subject in the standard canon of legal education can claim such an august tradition, such rigour of analysis, and such sublime irrelevance, as the law of contract. The multitudes of textbooks typically repeat an interpretation of the subject which has remained unaltered for a century or more in its categorization of the legal materials. The latent values which inform these works include a priority attached to personal liberty, minimal regulation of market transactions, and a profound divide between private economic transactions and public control over the social order. This fidelity to nineteenth-century laissez- faire ideals, which is unmatched in other fields of legal studies, often remains concealed behind a presentation of the law which emphasizes the formal, technical, and historical qualities of legal reasoning..... My interpretation of the legal materials emphasizes the way the law both establishes market transactions as an important site for citizens to acquire meaning for their lives, and controls the market for the sake of establishing and protecting public goods.

I have referred to these goals compendiously as a conception of the ‘social market’.”. Collins above n 5 at 253. In 2001 the Department of Trade and Industry asked the Law Commission and Scottish Law Commission to rewrite the law of unfair contract terms in a single regime in a clear and accessible style. In recommendations published in 2005, the Commissions produced a draft Bill aimed at preserving the existing level of consumer protection, rounding up rather than down, when there was a discrepancy between the 1977 Act and the Directives. It is interesting to note that t he Bill distinguishes between consumers, very small businesses and other businesses.

The protections given to businesses in their dealings with each other in relation to standard contract terms are not as extensive as those given to consumers. However, very small businesses will be able to challenge any standard term of the contract which has not been altered throughout negotiations and is not the subject matter of the contract or the price. An interesting recommendation in favour of consumers, contained in para 9(4) of the Commission’s Summary, is that: “ [I]n claims brought by consumers, the burden of proof lies on the business to show that the term is fair. Again this follows the 1977 Act.

The business will generally have far greater resources than the consumer so, where fairness of a term is in issue, it should be required to justify its position.”. Id at para 2.7.4.4.

In keeping with the broad proposals of the Commission, the Consumer Protection Bill (Government Gazette 28629 GN R489, 15 March 2006) was recently published by the Department of Trade and Industry for public comment. The preamble states that: “ The people of South Africa recognise—.... That it is necessary to develop and employ innovative means to— (a)fulfil the rights of historically disadvantaged persons and to promote their full participation as consumers; (b)protect the interests of all consumers, ensure accessible, transparent and efficient redress for consumers who are subjected to abuse or exploitation in the marketplace; and (c)give effect to the internationally recognised customer rights”.

Section 3(1) goes on to provide that— “ The purpose of the Act is to promote and advance the social and economic welfare of consumers in South Africa by— (a)establishing a legal framework for the achievement and maintenance of a consumer market that is fair, accessible, efficient, sustainable and responsible”. In Chapter 2, which deals with fundamental consumer rights, special attention is given to the question of notice to the consumer of clauses which provide for exemption from liability.

Contents • • • • • • • • • History [ ] proposed that social structures evolve from roles derived from to those based on contractual freedom. A status system establishes obligations and relationships by birth, but a contract presumes that the individuals are free and equal.

Modern libertarianism, such as that advanced by, sees freedom of contract as the expression of the independent decisions of separate individuals pursuing their own interests under a '.' United States [ ] Lochner v. New York [ ]. Main article: In 1902 a New York baker named Joseph Lochner was fined for violating a state law limiting the number of hours his employees could work. He sued the state on the grounds that he was denied his right to 'due process.' Lochner claimed that he had the right to freely contract with his employees and that the state had unfairly interfered with this. In 1905, the used the to declare unconstitutional the New York state statute imposing a limit on hours of work.

Wrote for the majority: 'Under that provision no state shall deprive any person of life, liberty, or property without due process of law. The right to purchase or to sell labor is part of the liberty protected by this amendment.' Writing in dissent, accused the majority of basing its decision on ideology.

He believed that it was making law based on economics rather than interpreting the constitution. He believed that 'Liberty of Contract' did not exist and that it was not intended in the Constitution. Afterward [ ] In his 'Liberty of Contract' (1909), critiqued freedom-of-contract laws by laying out case after case in which labor rights were struck down by state and federal Supreme Courts.

Pound argued the courts' rulings were 'simply wrong' from the standpoint of common law and 'even from that of a sane individualism' (482). Pound further compared the situation of labor legislation in his time to common opinion of and that the two were 'of the same type' (484). Pound lamented that the legacy of such 'academic' and 'artificial' judicial rulings for liberty of contract engendered a 'lost respect for the courts' but predicted a 'bright' future for labor legislation (486-487).

The Supreme Court applied the liberty of contract doctrine sporadically over the next three decades but generally upheld reformist legislation as being within the states' police power. In 1937 the Court reversed its view in the case. In that case the court upheld a law setting a. United Kingdom [ ] In the late 19th century, the English judiciary espoused 'freedom of contract' as a generally applicable feature of public policy, best expressed in.

In the later 20th century, the view of the common law had changed completely. In, compared 'freedom of contract' with oppression of the weak, as he outlined the development the law had undergone. “ The heyday of freedom of contract None of you nowadays will remember the trouble we had - when I was called to the Bar - with exemption clauses. They were printed in small print on the back of tickets and order forms and invoices. They were contained in catalogues or timetables. They were held to be binding on any person who took them without objection.

No one ever did object. He never read them or knew what was in them. No matter how unreasonable they were, he was bound. All this was done in the name of 'freedom of contract.' But the freedom was all on the side of the big concern which had the use of the printing press.

No freedom for the little man who took the ticket or order form or invoice. The big concern said, 'Take it or leave it.' The little man had no option but to take it.

The big concern could and did exempt itself from liability in its own interest without regard to the little man. It got away with it time after time.

When the courts said to the big concern, 'You must put it in clear words,' the big concern had no hesitation in doing so. It knew well that the little man would never read the exemption clauses or understand them. It was a bleak winter for our law of contract. It is illustrated by two cases, [1930] 1 K.B.

41 (in which there was exemption from liability, not on the ticket, but only in small print at the back of the timetable, and the company were held not liable) and [1934] 2 K.B. 394 (in which there was complete exemption in small print at the bottom of the order form, and the company were held not liable). The secret weapon Faced with this abuse of power - by the strong against the weak - by the use of the small print of the conditions - the judges did what they could to put a curb upon it. They still had before them the idol, 'freedom of contract.' They still knelt down and worshipped it, but they concealed under their cloaks a secret weapon. They used it to stab the idol in the back. This weapon was called 'the true construction of the contract.'

They used it with great skill and ingenuity. They used it so as to depart from the natural meaning of the words of the exemption clause and to put upon them a strained and unnatural construction. In case after case, they said that the words were not strong enough to give the big concern exemption from liability; or that in the circumstances the big concern was not entitled to rely on the exemption clause. If a ship deviated from the contractual voyage, the owner could not rely on the exemption clause. If a warehouseman stored the goods in the wrong warehouse, he could not pray in aid the limitation clause.

If the seller supplied goods different in kind from those contracted for, he could not rely on any exemption from liability. If a shipowner delivered goods to a person without production of the bill of lading, he could not escape responsibility by reference to an exemption clause. In short, whenever the wide words - in their natural meaning - would give rise to an unreasonable result, the judges either rejected them as repugnant to the main purpose of the contract, or else cut them down to size in order to produce a reasonable result. This is illustrated by these cases in the House of Lords: [1893] A.C.

351; [1922] 2 A.C. 263; [1927] A.C. 1; and by [1952] A.C. 192 and [1959] A.C. 576 in the Privy Council; and innumerable cases in the Court of Appeal, culminating in [1978] Q.B. But when the clause was itself reasonable and gave rise to a reasonable result, the judges upheld it; at any rate, when the clause did not exclude liability entirely but only limited it to a reasonable amount.

So where goods were deposited in a cloakroom or sent to a laundry for cleaning, it was quite reasonable for the company to limit their liability to a reasonable amount, having regard to the small charge made for the service. These are illustrated by [1921] 2 K.B.

426; [1945] K.B. 189 and [1973] Q.B. ” See also [ ] • • • • • References [ ] • Atiyah, P.S: 'The Rise and Fall of Freedom of Contract' (Oxford University Press, USA; New ed; Dec 12, 1985) • Bernstein, David E.: • Trebilcock, Michael J.: 'The Limits of Freedom of Contract' (Harvard University Press) Notes [ ].